lcb - trust deed agreement
TRANSCRIPT
Execution Copy
MT DOCS 12391588v6
TRUST DEED
RELATING TO A
U.S.$7 BILLION
GLOBAL COVERED BOND PROGRAMME
DATED OCTOBER 31, 2013
NATIONAL BANK OF CANADAas Issuer
and
NBC COVERED BOND (LEGISLATIVE) GUARANTORLIMITED PARTNERSHIP
as Guarantor
and
COMPUTERSHARE TRUST COMPANY OF CANADAas Bond Trustee
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TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATIONS ........................................................................1
2. AMOUNT AND ISSUE OF THE COVERED BONDS .......................................................3
3. FORMS OF THE COVERED BONDS .................................................................................8
4. FEES, DUTIES AND TAXES.............................................................................................13
5. COVENANT OF COMPLIANCE.......................................................................................13
6. CANCELLATION OF COVERED BONDS AND RECORDS .........................................14
7. COVERED BOND GUARANTEE .....................................................................................15
8. PAYMENTS UNDER THE COVERED BOND GUARANTEE .......................................21
9. NON PAYMENT.................................................................................................................23
10. PROCEEDINGS, ACTION AND INDEMNIFICATION...................................................23
11. APPLICATION OF MONEYS............................................................................................24
12. NOTICE OF PAYMENTS...................................................................................................25
13. PARTIAL PAYMENTS ......................................................................................................25
14. COVENANTS BY THE ISSUER........................................................................................26
15. COVENANTS BY THE ISSUER AND THE GUARANTOR ...........................................26
16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BOND TRUSTEE30
17. REMUNERATION AND INDEMNIFICATION OF BOND TRUSTEE ..........................30
18. POWERS OF THE BOND TRUSTEE................................................................................32
19. BOND TRUSTEE’S LIABILITY........................................................................................39
20. BOND TRUSTEE CONTRACTING WITH THE ISSUER AND THE GUARANTOR...40
21. WAIVER, AUTHORIZATION AND DETERMINATION AND SUBSTITUTION........41
22. HOLDER OF DEFINITIVE COVERED BOND ASSUMED TO BE RECEIPTHOLDERAND COUPONHOLDER....................................................................................................43
23. CURRENCY INDEMNITY ................................................................................................43
24. NEW BOND TRUSTEE......................................................................................................44
25. SEPARATE AND CO-TRUSTEES ....................................................................................45
26. BOND TRUSTEE’S RETIREMENT AND REMOVAL....................................................45
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27. BOND TRUSTEE’S POWERS TO BE ADDITIONAL.....................................................46
28. NOTICES .............................................................................................................................47
29. AMENDMENTS..................................................................................................................47
30. NON-PETITION..................................................................................................................48
31. GOVERNING LAW ............................................................................................................48
32. SUBMISSION TO JURISDICTION ...................................................................................48
33. COUNTERPARTS...............................................................................................................48
34. LIABILITY OF LIMITED PARTNERS .............................................................................49
SCHEDULE 1 TERMS AND CONDITIONS OF THE COVERED BONDS...............................1
SCHEDULE 2 FORMS OF BEARER GLOBAL AND DEFINITIVE COVERED BONDS,RECEIPTS, COUPONS AND TALONS........................................................................................1
PART 1 FORM OF TEMPORARY GLOBAL COVERED BOND...............................................1
PART 2 FORM OF PERMANENT GLOBAL COVERED BOND...............................................1
PART 3 FORM OF BEARER DEFINITIVE COVERED BOND..................................................1
PART 4 FORM OF RECEIPT.........................................................................................................1
PART 5 FORM OF COUPON ........................................................................................................1
PART 6 FORM OF TALON ...........................................................................................................1
PART 7 FORM OF CERTIFICATE TO BE PRESENTED BY EUROCLEAR ORCLEARSTREAM, LUXEMBOURG..............................................................................................1
SCHEDULE 3 FORMS OF REGISTERED GLOBAL AND DEFINITIVE COVERED BONDS1
PART 1 FORM OF REGULATION S GLOBAL COVERED BOND ..........................................1
PART 2 FORM OF RULE 144A GLOBAL COVERED BOND ...................................................1
PART 3 FORM OF REGISTERED DEFINITIVE COVERED BOND.........................................1
SCHEDULE 4 FORM OF NOTICE TO PAY ................................................................................1
SCHEDULE 5 PROVISIONS FOR MEETINGS OF COVERED BONDHOLDERS ..................1
SCHEDULE 6 N COVERED BONDS ...........................................................................................1
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PART 1 FORM OF N COVERED BOND......................................................................................1
PART 2 TERMS AND CONDITIONS OF THE N COVERED BONDS......................................1
PART 3 PRO FORMA FINAL TERMS FOR N COVERED BONDS ..........................................1
PART 4 FORM OF N COVERED BOND ASSIGNMENT AGREEMENT .................................1
PART 5 FORM OF NOTIFICATION RE RESTRICTED ASSETS..............................................1
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Trust Deed
THIS TRUST DEED (this “Agreement” or “Trust Deed”) is made on October 31, 2013BETWEEN:
(1) National Bank of Canada, a Canadian chartered bank having its executive offices at 600De La Gauchetière Street West, Montréal, Québec, Canada H3B 4L2 (the “Issuer”);
(2) NBC Covered Bond (Legislative) Guarantor Limited Partnership, a limited partnershipconstituted under the Limited Partnerships Act (Ontario) and having its principal place ofbusiness at 66 Wellington Street West, Suite 5300, TD Bank Tower, Toronto, Ontario,Canada, M5K 1E6, herein represented by its managing general partner, NBC CoveredBond (Legislative) GP Inc. (the “Guarantor”);
(3) Computershare Trust Company of Canada, a company incorporated under the laws ofCanada, whose registered office is at 1500 University Street, Suite 700, Montréal,Québec, Canada H3A 3S8 (in its capacity as the Bond Trustee for the CoveredBondholders, the Receiptholders and the Couponholders, the “Bond Trustee” whichexpressions shall, wherever the context so admits, include such company and all otherpersons or companies for the time being the bond trustee or bond trustees) as bond trusteefor the Covered Bondholders, the Receiptholders and the Couponholders.
WHEREAS:
(1) The Issuer has established a Programme pursuant to which the Issuer may from time totime issue Covered Bonds as set out herein. Covered Bonds up to a maximum nominalamount (calculated in accordance with Section 2 of the Dealership Agreement) from timeto time outstanding of U.S.$7 billion (subject to increase as provided in the DealershipAgreement) (the “Programme Limit”) may be issued pursuant to the Programme.
(2) By a resolution of the Board of Directors of NBC Covered Bond (Legislative) GP Inc. inits capacity as managing general partner of the Guarantor passed on October 25, 2013 theGuarantor has resolved to guarantee all Covered Bonds issued under the said Programmeand all other amounts payable by the Issuer hereunder in the circumstances describedherein.
(3) The Bond Trustee has agreed to act as bond trustee for the benefit of the CoveredBondholders, the Receiptholders and the Couponholders upon and subject to the termsand conditions hereof.
NOW THIS TRUST DEED WITNESSES AND IT IS AGREED AND DECLARED asfollows:
1. Definitions and Interpretations
1.1 In this Trust Deed unless there is anything in the subject or context inconsistent therewiththe following shall apply:
words denoting the singular shall include the plural and vice versa;
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words denoting one gender only shall include the other genders; and
words denoting persons only shall include firms and corporations and vice versa.
1.2 (a) All references herein to principal and/or principal amount and/or interest inrespect of the Covered Bonds or to any moneys payable by the Issuer or theGuarantor hereunder shall, unless the context otherwise requires, be construed inaccordance with Condition 8.04.
(b) All references herein to any statute or any provision of any statute shall bedeemed also to refer to any statutory modification or re enactment thereof or anystatutory instrument, order or regulation made thereunder or under any suchmodification or re enactment.
(c) All references herein to any action, remedy or method of proceeding for theenforcement of the rights of creditors shall be deemed to include, in respect of anyjurisdiction other than the Province of Ontario, Canada, references to such action,remedy or method of proceeding for the enforcement of the rights of creditorsavailable or appropriate in such jurisdiction as shall most nearly approximate tosuch action, remedy or method of proceeding described or referred to herein.
(d) All references herein to Euroclear and/or Clearstream, Luxembourg and/or DTCshall, whenever the context so permits (but not in the case of any NGCB), bedeemed to include references to any additional or alternative clearing system as isapproved by the Issuer, the Issuing and Paying Agent and the Bond Trustee or asmay otherwise be specified in the applicable Final Terms.
(e) Unless the context otherwise requires words or expressions used in the trustpresents shall bear the same meanings as in the Bank Act (Canada).
(f) In this Trust Deed references to Schedules, Clauses, sub clauses, paragraphs andsub paragraphs shall be construed as references to the Schedules to this TrustDeed and to the Clauses, sub clauses, paragraphs and sub paragraphs of this TrustDeed respectively.
(g) Wherever in these presents there is a requirement for the consent of, or a requestfrom, the Covered Bondholders, then, for so long as any of the RegisteredCovered Bonds is represented by a Registered Global Covered Bond registered inthe name of DTC or its nominee, DTC may mail an Omnibus Proxy to the Issuerin accordance with and in the form used by DTC as part of its usual proceduresfrom time to time. Such Omnibus Proxy shall assign the right to give such consentor, as the case may be, make such request to DTC’s direct participants as of therecord date specified therein and any such assignee participant may give therelevant consent or, as the case may be, make the relevant request in accordancewith these presents.
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(h) In this Trust Deed tables of contents and Clause headings are included for ease ofreference and shall not affect the construction hereof.
(i) All references herein to this “Agreement” or “Trust Deed” shall have the samemeaning as Trust Deed in the Master Definitions and Construction Agreement.
1.3 The master definitions and construction agreement made between the parties to theTransaction Documents on October 31, 2013 (as the same may be amended, restated,varied or supplemented from time to time with the consent of the parties thereto, the“Master Definitions and Construction Agreement”) is expressly and specificallyincorporated into this Trust Deed and, accordingly, the expressions defined in the MasterDefinitions and Construction Agreement (as so amended, restated, varied orsupplemented) shall, except where the context otherwise requires and save whereotherwise defined herein, have the same meanings in this Trust Deed, including therecitals hereto and this Trust Deed shall be construed in accordance with theinterpretation provisions set out in Clause 2 of the Master Definitions and ConstructionAgreement. In the event of inconsistency between the Master Definitions andConstruction Agreement and this Trust Deed, this Trust Deed shall prevail.
1.4 All references herein to the relevant currency shall be construed as references to thecurrency in which payments in respect of the Covered Bonds, Receipts and/or Couponsof the relevant Series are to be made as indicated in the applicable Final Terms.
1.5 All references herein to Covered Bonds having a “listing” or being “listed” on a StockExchange shall (i) in relation to the London Stock Exchange, be construed to mean thatsuch Covered Bonds have been admitted to the Official List by the UK Listing Authorityand admitted to trading on the London Stock Exchange’s market for listed securities or(ii) in relation to any Stock Exchange in the EEA, be construed to mean that suchCovered Bonds have been admitted to trading on a market which is a regulated marketfor purposes of Directive 2004/39/EC or (iii) to any other Stock Exchange, be construedto mean that the Covered Bonds have been listed on that Stock Exchange and/or totrading on the relevant market, as the case may be, and all references in the trust presentsto “listing” and “listed” shall include references to “quotation” and “quoted” respectively.
2. Amount and Issue of the Covered Bonds
2.1 Amount of the Covered Bonds, Final Terms and Legal Opinions:
The Covered Bonds will be issued in Series in an aggregate nominal amount from time totime outstanding not exceeding the Programme Limit from time to time and for thepurpose of determining such aggregate nominal amount Clause 2 of the DealershipAgreement shall apply.
By not later than noon (Toronto time) on the third Business Day preceding each proposedIssue Date, the Issuer shall deliver or cause to be delivered to the Bond Trustee a copy ofthe applicable Final Terms and drafts of all (if any) legal opinions to be given in relation
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to the relevant issue and shall notify the Bond Trustee in writing without delay of therelevant Issue Date and the nominal amount of the Covered Bonds to be issued. Upon theissue of the relevant Covered Bonds, such Covered Bonds shall become constitutedhereby without further formality.
Before the first issue of Covered Bonds occurring after each anniversary of this TrustDeed and on such other occasions as the Bond Trustee so requests (on the basis that theBond Trustee considers it necessary in view of a change (or proposed change) in Ontarioor other applicable law materially affecting the Issuer or the Guarantor (as the case maybe), this Trust Deed, the Dealership Agreement, the Agency Agreement or the SecurityAgreement or the Bond Trustee has other reasonable grounds), the Issuer or, as the casemay be, the Guarantor will procure that further legal opinion(s) (relating, if applicable, toany such change or proposed change) in such form and with such content as the BondTrustee may reasonably require from the legal advisers specified in the DealershipAgreement or such other legal advisers as the Bond Trustee may require is/are deliveredto the Bond Trustee. Whenever such a request is made with respect to any CoveredBonds to be issued, the receipt of such opinion in a form satisfactory to the Bond Trusteeshall be a further condition precedent to the issue of those Covered Bonds.
2.2 Covenant to repay principal and to pay interest:
The Issuer covenants with the Bond Trustee that it shall, as and when the Covered Bondsof any Series or any of them or any instalment of principal in respect thereof becomesdue to be redeemed, or on such earlier date as the same or any part thereof may becomedue and repayable thereunder, in accordance with the Conditions, unconditionally pay orprocure to be paid to or to the order of the Bond Trustee in the relevant currency inimmediately available funds the Principal Amount Outstanding in respect of the CoveredBonds of such Series or the amount of such instalment becoming due for redemption orrepayment on that date and (except in the case of Zero Coupon Covered Bonds) shall inthe meantime and until redemption in full of the Covered Bonds of such Series (bothbefore and after any decree, judgment or other order of a court of competent jurisdiction)unconditionally pay or procure to be paid in immediately available funds to or to theorder of the Bond Trustee as aforesaid interest (which shall accrue from day to day) onthe Principal Amount Outstanding of the Covered Bonds outstanding of such Series atrates and/or in amounts calculated from time to time in accordance with, or specified in,and on the dates provided for in, the Conditions (subject to Clause 2.4); PROVIDEDTHAT:
(a) except for Excess Proceeds, every payment (whether by the Issuer or theGuarantor) of principal or interest or other sum due in respect of the CoveredBonds made to or to the order of the Issuing and Paying Agent or, as the case maybe, the Registrar, in the manner provided in the Agency Agreement shall be insatisfaction pro tanto of the relative covenant by the Issuer contained in thisClause or (as the case may be) by the Guarantor under the Guarantee in relation tothe Covered Bonds of such Series except to the extent that there is a default in the
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subsequent payment thereof in accordance with the Conditions to the relevantCovered Bondholders, Receiptholders or Couponholders (as the case may be);
(b) every payment of Excess Proceeds in accordance with the Conditions and Clause11.2 to or to the order of the Bond Trustee shall be in satisfaction (for the benefitof the Issuer only and not the Guarantor) pro tanto of the relative covenant by theIssuer in this Clause contained in respect of the Excess Proceeds which are dueand payable in relation to the Covered Bonds of such Series (but as provided inClause 11.2, shall not do so for the purposes of the subrogation rights of theGuarantor contemplated by Clause 7.8 and shall not reduce or discharge anyobligations of the Guarantor);
(c) in the case of any payment of principal which is not made to the Bond Trustee orthe Issuing and Paying Agent or, as the case may be, the Registrar, on or beforethe due date or which is made on or after accelerated maturity following an IssuerEvent of Default or Guarantor Event of Default, interest shall continue to accrueon the Principal Amount Outstanding of the relevant Covered Bonds (except inthe case of Zero Coupon Covered Bonds to which the provisions of Condition5.10 shall apply) (both before and after any demand, maturity, decree, judgmentor other order of a court of competent jurisdiction) at the rates aforesaid up to andincluding the date which the Bond Trustee determines in its absolute discretion tobe the date on and after which payment is to be made in respect thereof as statedin a notice given to the holders of such Covered Bonds (such date to be not laterthan 14 days after the day on which the whole of such principal amount, togetherwith an amount equal to the interest which has accrued and is to accrue pursuantto this proviso up to and including that date, has been received by the BondTrustee or the Issuing and Paying Agent or, as the case may be, the Registrar);and
(d) in any case where payment of the whole or any part of the principal amount ofany Covered Bond is improperly withheld or refused upon due presentationthereof (other than in circumstances contemplated by (c) above) interest shallaccrue on the Principal Amount Outstanding of such Covered Bond (except in thecase of Zero Coupon Covered Bonds to which the provisions of Condition 5.10shall apply) payment of which has been so withheld or refused (both before andafter any decree, judgment or other order of a court of competent jurisdiction) atthe rates aforesaid from the date of such withholding or refusal until the date onwhich, upon further presentation of the relevant Covered Bond (if required), therelevant payment is made or, if earlier (except where presentation or surrender ofthe relevant Covered Bond is not required as a precondition of payment), theseventh day after the date on which, the Issuing and Paying Agent or, as the casemay be, the Registrar having received the funds required to make such payment,notice is given to the relevant Covered Bondholder(s) in accordance withCondition 14 (Notices) that the Issuing and Paying Agent or, as the case may be,
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the Registrar has received the required funds (except to the extent that there isfailure in the subsequent payment thereof to the relevant Covered Bondholder(s)).
For greater certainty and without limitation, the Bond Trustee will hold the benefit of thiscovenant on trust for the Covered Bondholders, the Receiptholders and theCouponholders and itself in accordance herewith.
2.3 Bond Trustee’s requirements regarding Paying Agents etc:
(a) At any time after an Issuer Event of Default or Potential Issuer Event of Defaultshall have occurred and is continuing or the Bond Trustee shall have received anymoney from the Issuer which it proposes to pay under Clause 11 to the relevantCovered Bondholders, Receiptholders and/or Couponholders, the Bond Trusteemay:
(i) by notice in writing to the Issuer, the Guarantor, the Issuing and PayingAgent and the other Agents require the Issuing and Paying Agent and theother Agents pursuant to the Agency Agreement (A) to act thereafter asIssuing and Paying Agent and other Agents respectively of the BondTrustee in relation to payments of such moneys to be made by or on behalfof the Bond Trustee under the terms hereof mutatis mutandis on the termsprovided in the Agency Agreement (save that the Bond Trustee’s liabilityunder any provisions thereof for the indemnification, remuneration andpayment of out of pocket expenses of the Issuing and Paying Agent andthe other Agents shall be limited to the amounts for the time being held bythe Bond Trustee on the trusts hereof relating to the Covered Bonds of therelevant Series and available for such purpose) and thereafter to hold allCovered Bonds, Receipts and Coupons and all sums, documents andrecords held by them in respect of Covered Bonds, Receipts and Couponson behalf of the Bond Trustee, or (B) to deliver up all Covered Bonds,Receipts and Coupons and all sums, documents and records held by themin respect of the Covered Bonds, Receipts and Coupons to the BondTrustee or as the Bond Trustee shall direct in such notice provided thatsuch notice shall be deemed not to apply to any documents or recordswhich the Issuing and Paying Agent and/or the other Agents is/are obligednot to release by any law or regulation; or
(ii) by notice in writing to the Issuer require it (but not the Guarantor) to makeall subsequent payments in respect of the Covered Bonds, Receipts andCoupons to or to the order of the Bond Trustee and not to the Issuing andPaying Agent and with effect from the issue of any such notice to theIssuer and until such notice is withdrawn proviso (a) to Clause 2.2 relatingto the Covered Bonds shall cease to have effect in respect of the Issuer.
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(b) At any time after a Guarantor Event of Default or Potential Guarantor Event ofDefault shall have occurred and is continuing or the Bond Trustee shall havereceived any money from the Guarantor which it proposes to pay under Clause 11to the relevant Covered Bondholders, Receiptholders and/or Couponholders, theBond Trustee may:
(i) by notice in writing to the Issuer, the Guarantor, the Issuing and PayingAgent and the other Agents require the Issuing and Paying Agent and theother Agents pursuant to the Agency Agreement (A) to act thereafter asIssuing and Paying Agent and other Agents respectively of the BondTrustee in relation to payments of such moneys to be made by or on behalfof the Bond Trustee under the terms hereof mutatis mutandis on the termsprovided in the Agency Agreement (save that the Bond Trustee’s liabilityunder any provisions thereof for the indemnification, remuneration andpayment of out of pocket expenses of the Issuing and Paying Agent andthe other Agents shall be limited to the amounts for the time being held bythe Bond Trustee on the trusts hereof relating to the Covered Bonds of therelevant Series and available for such purpose) and thereafter to hold allCovered Bonds, Receipts and Coupons and all sums, documents andrecords held by them in respect of Covered Bonds, Receipts and Couponson behalf of the Bond Trustee, or (B) to deliver up all Covered Bonds,Receipts and Coupons and all sums, documents and records held by themin respect of the Covered Bonds, Receipts and Coupons to the BondTrustee or as the Bond Trustee shall direct in such notice provided thatsuch notice shall be deemed not to apply to any documents or recordswhich the Issuing and Paying Agent and/or the other Agents is/are obligednot to release by any law or regulation; or
(ii) by notice in writing to the Guarantor require it to make all subsequentpayments in respect of the Covered Bonds, Receipts and Coupons to or tothe order of the Bond Trustee and not to the Issuing and Paying Agent andwith effect from the issue of any such notice to the Guarantor and untilsuch notice is withdrawn proviso (a) to Clause 2.2 relating to the CoveredBonds shall cease to have effect.
2.4 If the Floating Rate Covered Bonds of any Series become immediately due and repayablefollowing an Issuer Event of Default or a Guarantor Event of Default the rate and/oramount of interest payable in respect of them will be calculated by the Calculation Agentat the same intervals as if such Covered Bonds had not become due and repayable, thefirst of which will commence on the expiry of the Interest Period during which theCovered Bonds of the relevant Series become so due and repayable mutatis mutandis inaccordance with the provisions of Condition 5 (Interest).
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2.5 Currency of payments:
All payments in respect of, under and in connection herewith and the Covered Bonds ofany Series to the relevant Covered Bondholders, Receiptholders and Couponholders shallbe made in the relevant currency all in accordance with the Conditions.
2.6 Further Covered Bonds:
The Issuer shall be at liberty from time to time (but subject always to the provisionshereof) without the consent of the Covered Bondholders, Receiptholders orCouponholders to create and issue further Covered Bonds having terms and conditionsthe same as the Covered Bonds of any Series or the same in all respects save for theamount and date of the first payment of interest thereon, issue date and/or purchase priceand so that the same shall be consolidated and form a single series with the outstandingCovered Bonds of such Series.
2.7 Separate Series:
Subject to the provisions of the next sentence, the Covered Bonds of each Series shallform a separate Series of Covered Bonds and accordingly, unless for any purpose theBond Trustee in its absolute discretion shall otherwise determine, the provisions of thissentence and of Clauses 3 to 23 (both inclusive) and Schedule 3 and Schedule 4 shallapply mutatis mutandis separately and independently to the Covered Bonds of eachSeries. However, for the purposes of this Clause 2.7, Condition 7 (Events of Default)(insofar as it relates to a Programme Resolution) Condition 13 (Meetings of Holders ofCovered Bonds, Modification and Waiver), Clauses 18(n), 24 and 26 and 10.1 and(insofar as it relates to Condition 7 (Events of Default) or to a Programme Resolution orClauses 10.1, 24 or 26) Schedule 4, the Covered Bonds shall be deemed to constitute asingle Series and the provisions of such Conditions and Clause shall apply to all theCovered Bonds together as if they constituted a single Series. In such Clauses andSchedule the expressions Covered Bonds, Covered Bondholders, Receipts,Receiptholders, Coupons, Couponholders, Talons and Talonholders shall beconstrued accordingly.
3. Forms of the Covered Bonds
3.1 Bearer Global Covered Bonds:
(a) The Bearer Covered Bonds of each Tranche will initially be represented by asingle Temporary Global Covered Bond or a single Permanent Global CoveredBond, as indicated in the applicable Final Terms. Each Temporary GlobalCovered Bond shall be exchangeable, upon a request as described therein, foreither Bearer Definitive Covered Bonds together with, where applicable, Receiptsand (except in the case of Zero Coupon Covered Bonds) Coupons and, whereapplicable, Talons attached, or a Permanent Global Covered Bond in each case inaccordance with the provisions of such Temporary Global Covered Bond. Each
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Permanent Global Covered Bond shall be exchangeable for Bearer DefinitiveCovered Bonds together with, where applicable, Receipts and (except in the caseof Zero Coupon Covered Bonds) Coupons and, where applicable, Talonsattached, in accordance with the provisions of such Permanent Global CoveredBond. All Bearer Global Covered Bonds shall be prepared, completed anddelivered to a common depositary (in the case of a CGCB) or a CommonSafekeeper (in the case of a NGCB) for Euroclear and Clearstream, Luxembourgin accordance with the provisions of the Dealership Agreement or to anotherappropriate depositary in accordance with any other agreement between the Issuerand the relevant Dealer(s) and, in each case, the Agency Agreement.
(b) Each Temporary Global Covered Bond shall be printed or typed in the form orsubstantially in the form set out in Part 1 of Schedule 2 and may be a facsimile.Each Temporary Global Covered Bond shall have annexed thereto a copy of theapplicable Final Terms and shall be signed manually or in facsimile by a personduly authorized by the Issuer on behalf of the Issuer and shall be authenticated byor on behalf of the Issuing and Paying Agent and shall, in the case of NGCB, beeffectuated by the Common Safekeeper acting on instructions of the Issuing andPaying Agent. Each Temporary Global Covered Bond so executed andauthenticated shall be binding and valid obligations of the Issuer and theGuarantee in respect thereof shall be binding and valid obligations of theGuarantor and title to such Temporary Global Covered Bond shall pass bydelivery.
(c) Each Permanent Global Covered Bond shall be printed or typed in the form orsubstantially in the form set out in Part 2 of Schedule 2 and may be a facsimile.Each Permanent Global Covered Bond shall have annexed thereto a copy of theapplicable Final Terms and shall be signed manually or in facsimile by a personduly authorized by the Issuer on behalf of the Issuer and shall be authenticated byor on behalf of the Issuing and Paying Agent and shall, in the case of NGCB, beeffectuated by the Common Safekeeper acting on instructions of the Issuing andPaying Agent. Each Permanent Global Covered Bond so executed andauthenticated shall be a binding and valid obligation of the Issuer and theGuarantee in respect thereof shall be a binding and valid obligation of theGuarantor and title to such Permanent Global Covered Bond shall pass bydelivery.
3.2 Registered Global Covered Bonds:
(a) Subject as provided below, Registered Covered Bonds of a Tranche that areinitially offered and sold in the United States in reliance on Rule 144A under theSecurities Act shall be represented by a Rule 144A Global Covered Bond andRegistered Covered Bonds of a Series that are initially offered and sold inoffshore transactions in reliance on Regulation S under the Securities Act shall berepresented by a Regulation S Global Covered Bond. Registered Global Covered
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Bonds will either (i) be deposited with a custodian for, and registered in the nameof a nominee of, DTC or (ii) be deposited with a common depositary for, andregistered in the name of a nominee of, Euroclear and Clearstream, Luxembourg,as specified in the applicable Final Terms.
(b) Registered Global Covered Bonds shall be exchangeable and transferable only inaccordance with, and subject to, the provisions of the Registered Global CoveredBonds and the Agency Agreement and the rules and operating procedures for thetime being of DTC, Euroclear and Clearstream, Luxembourg, including therequirement that all Registered Definitive Covered Bonds issued in exchange fora Legended Covered Bond shall bear a legend in the same form mutatis mutandisas that set out in the Rule 144A Global Covered Bond.
(c) Each Registered Global Covered Bond shall be printed or typed in the form of orsubstantially in the form set out in Part 1 or 2 (as applicable) of Schedule 3 andmay be a facsimile. Each Registered Global Covered Bond shall have annexedthereto a copy of the applicable Final Terms and shall be signed manually or infacsimile by a person duly authorized by the Issuer on behalf of the Issuer andshall be authenticated by or on behalf of the Registrar. Each Registered GlobalCovered Bond as executed and authenticated shall be a binding and validobligation of the Issuer and the Guarantee in respect thereof shall be a binding andvalid obligation of the Guarantor.
3.3 Definitive Covered Bonds:
(a) The Bearer Definitive Covered Bonds, the Receipts, the Coupons and the Talonsshall be to bearer in the respective forms or substantially in the respective formsset out in Parts 3, 4, 5 and 6, respectively, of Schedule 2. The Bearer DefinitiveCovered Bonds, the Receipts, the Coupons and the Talons shall be seriallynumbered and, if listed or quoted, shall be security printed in accordance with therequirements (if any) from time to time of the relevant Stock Exchange and therelevant Conditions may be incorporated by reference into such Bearer DefinitiveCovered Bonds unless not so permitted by the relevant Stock Exchange (if any),or the Bearer Definitive Covered Bonds shall be endorsed with or have attachedthereto the relevant Conditions, and, in either such case, the Bearer DefinitiveCovered Bonds shall have endorsed thereon or attached thereto a copy of theapplicable Final Terms (or the relevant provisions thereof). Title to the BearerDefinitive Covered Bonds, the Receipts, the Coupons and the Talons shall pass bydelivery.
(b) Except with respect to N Covered Bonds, which shall be issued in accordancewith Section 3.4, the Registered Definitive Covered Bonds shall be in registeredform and shall be issued in the form or substantially in the form set out in Part Aor B (as applicable) of Part 3 of Schedule 3, shall be serially numbered, shall beendorsed with a legend in the same form mutatis mutandis as that set out on the
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Rule 144A Global Covered Bond (in the case of those issued in exchange forRule 144A Global Covered Bonds) and a Form of Transfer and, if listed orquoted, shall be security printed in accordance with the requirements (if any) fromtime to time of the relevant Stock Exchange and the relevant Conditions may beincorporated by reference into such Registered Definitive Covered Bonds unlessnot permitted by the relevant Stock Exchange (if any), or the RegisteredDefinitive Covered Bonds shall be endorsed with or have attached thereto therelevant Conditions and, in either case, the Registered Definitive Covered Bondsshall have endorsed thereon or attached thereto a copy of the applicable FinalTerms (or the relevant provisions thereof). Title to the Registered DefinitiveCovered Bonds shall pass upon registration of transfer in the Register kept by theRegistrar in respect thereof in accordance with the provisions of the AgencyAgreement and these presents.
(c) The Definitive Covered Bonds shall be signed manually or in facsimile by aperson duly authorized by the Issuer on behalf of the Issuer and shall beauthenticated by or on behalf of the Issuing and Paying Agent (in the case ofBearer Definitive Covered Bonds) or the Registrar (in the case of RegisteredDefinitive Covered Bonds). The Definitive Covered Bonds so executed andauthenticated, and the Receipts, the Coupons and Talons, upon execution andauthentication of the relevant Bearer Definitive Covered Bonds, shall be bindingand valid obligations of the Issuer and the Guarantee in respect thereof shall be abinding and valid obligation of the Guarantor. The Receipts, the Coupons and theTalons shall not be signed. No Bearer Definitive Covered Bond and none of theReceipts, Coupons or Talons appertaining to such Bearer Definitive CoveredBond shall be binding or valid until such Bearer Definitive Covered Bond shallhave been executed and authenticated as aforesaid. No Bearer Covered Bond maybe exchanged for a Registered Covered Bond or vice versa.
3.4 N Covered Bonds:
(a) N Covered Bonds shall be issued in the form or substantially in the form set out inPart 1 of Schedule 6, with such changes or in such other form as shall be agreed toby the Issuer, the Guarantor and the Bond Trustee with (i) the relevant N CoveredBond Conditions, (ii) the form of the N Covered Bond Assignment Agreementand (iii) the form of notification of the inclusion of N Covered Bonds in therestricted assets of the Holder (as set out in Part 5 of Schedule 6) annexed theretoand shall specify the name of the relevant Covered Bondholder. Each N CoveredBond shall form a Series of Covered Bonds and shall be issued separately to eachN Covered Bondholder and not by way of uniform issue subdivided into identicalN Covered Bonds. Each N Covered Bond executed and authenticated inaccordance with Section 3.3(c) shall be a binding and valid obligation of theIssuer and the Guarantee in respect thereof shall be a binding and valid obligationof the Guarantor.
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(b) Each N Covered Bond shall only be transferable by way of assignment andsurrender of the certificate representing the N Covered Bond to the Registrartogether with delivery to the Registrar of a duly completed and executed NCovered Bond Assignment Agreement in the form attached to the relevant NCovered Bond. Subject to the foregoing, title to the N Covered Bond shall passupon registration of transfer in the Register kept by the Registrar in respectthereof.
3.5 Facsimile signatures:
The Issuer may use the facsimile signature of any person who at the date such signature isaffixed to a Covered Bond is duly authorized by the Issuer notwithstanding that at thetime of issue of any of the Covered Bonds he may have ceased for any reason to be theholder of such office or so authorized.
3.6 Persons to be treated as Covered Bondholders:
Except as ordered by a court of competent jurisdiction or as required by law, the Issuer,the Guarantor, the Bond Trustee, the Issuing and Paying Agent, the Registrar, theExchange Agent, the Transfer Agents and the other Paying Agents (notwithstanding anynotice to the contrary and whether or not it is overdue and notwithstanding any notationof ownership or writing thereon or notice of any previous loss or theft thereof) may(i) (a) for the purpose of making payment thereon or on account thereof deem and treatthe bearer of any Bearer Global Covered Bond, Bearer Definitive Covered Bond, Receiptor Coupon and the registered holder of any Registered Global Covered Bond and (b) forthe purpose of voting, giving consents and making requests pursuant to these presentsdeem and treat the registered holder of any Registered Global Covered Bond, as theabsolute owner thereof and of all rights thereunder free from all encumbrances, and shallnot be required to obtain proof of such ownership or as to the identity of the bearer or, asthe case may be, the registered holder and (ii) for all other purposes deem and treat:
(a) the bearer of any Bearer Definitive Covered Bond, Receipt, Coupon or Talon andthe registered holder of any Registered Definitive Covered Bonds or N CoveredBond; and/or
(b) each person for the time being shown in the records of Euroclear or Clearstream,Luxembourg or, as the case may be, DTC or (except in the case of a NGCB) suchother additional or alternative clearing system approved by the Issuer, the BondTrustee, and the Issuing and Paying Agent, as having a particular nominal amountof Covered Bonds credited to his securities account,
as the absolute owner thereof free from all encumbrances and shall not be required toobtain proof of such ownership (other than, in the case of any person for the time beingso shown in such records, a certificate or letter of confirmation signed on behalf ofEuroclear or Clearstream Luxembourg or, as the case may be, DTC or any other form of
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record made by either of them) or as to the identity of the bearer of any Bearer GlobalCovered Bond, Bearer Definitive Covered Bond, Receipt, Coupon or Talon or of theregistered holder of any Registered Global Covered Bond or Registered DefinitiveCovered Bond.
3.7 Certificates of Euroclear and Clearstream, Luxembourg or DTC:
The Issuer, the Guarantor and the Bond Trustee may call for and, except in the case ofmanifest error, shall be at liberty to accept and place full reliance on as sufficientevidence thereof a certificate or letter of confirmation issued on behalf of Euroclear andClearstream, Luxembourg or DTC or any form of record made by any of them or suchother form of evidence and/or information and/or certification as it shall, in its absolutediscretion, think fit to the effect that at any particular time or throughout any particularperiod any particular person is, was, or will be, shown in its records as the holder of aparticular nominal amount of Covered Bonds represented by a Global Covered Bond and,if it does so rely, such letter of confirmation, form of record, evidence, information orcertification shall be conclusive and binding on all concerned.
4. Fees, Duties and Taxes
The Issuer will pay any stamp, issue, registration, documentary and other fees, duties andtaxes, including interest and penalties, payable (a) in Canada on or in connection with(i) the execution and delivery of this Trust Deed and the Security Agreement and (ii) theconstitution and original issue and initial delivery of the Covered Bonds, the Receipts andthe Coupons and the creation of the Security and (b) in any jurisdiction in connectionwith any action taken by or on behalf of the Bond Trustee or (where permitted hereunderso to do) any Covered Bondholder, Receiptholder or Couponholder or any other SecuredCreditor to enforce this Trust Deed and/or the other Transaction Documents.
5. Covenant of Compliance
Each of the Issuer and the Guarantor covenants with the Bond Trustee that it will complywith and perform and observe all the provisions hereof and the Security Agreementwhich are expressed to be binding on it. The Conditions shall be binding on the Issuer,the Guarantor, the Covered Bondholders, the Receiptholders and the Couponholders. TheBond Trustee shall be entitled to enforce the obligations of the Issuer and the Guarantorunder the Covered Bonds, the Receipts, the Coupons and the Conditions in the mannertherein provided as if the same were set out and contained in this Trust Deed, which shallbe read and construed as one document with the Covered Bonds, the Receipts and theCoupons. The Bond Trustee shall hold the benefit of this covenant upon trust for itselfand the Covered Bondholders, the Receiptholders and the Couponholders according to itsand their respective interests.
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6. Cancellation of Covered Bonds and Records
6.1 The Issuer shall procure that all Covered Bonds issued by it and which are (i) redeemedor (ii) purchased by or on behalf of the Issuer, or any of its Subsidiaries and surrenderedfor cancellation or (iii) which, being mutilated or defaced, have been surrendered andreplaced pursuant to Condition 12 (Replacement of Covered Bonds) (together in eachcase, in the case of Bearer Definitive Covered Bonds, with all unmatured Receipts andCoupons attached thereto or delivered therewith), and all Receipts and Coupons paid inaccordance with the relevant Conditions or which, being mutilated or defaced, have beensurrendered and replaced pursuant to Condition 12 (Replacement of Covered Bonds),shall forthwith be cancelled by or on behalf of the Issuer and a certificate signed by twoAuthorized Signatories of the Issuer stating:
(a) the aggregate principal amount of Covered Bonds which have been redeemed andthe aggregate amounts in respect of Receipts and Coupons which have been paid;
(b) the serial numbers of such Covered Bonds in definitive form and Receiptsdistinguishing between Bearer Covered Bonds and Registered Covered Bonds;
(c) the total numbers (where applicable, of each denomination) by maturity date ofsuch Receipts and Coupons;
(d) the aggregate amount of interest paid (and the due dates of such payments) onGlobal Covered Bonds and/or Registered Definitive Covered Bonds;
(e) the aggregate nominal amount of Covered Bonds (if any) which have beenpurchased by or on behalf of the Issuer or any of its Subsidiaries and cancelledand the serial numbers of such Covered Bonds in definitive form and, in the caseof Bearer Definitive Covered Bonds, the total number (where applicable, of eachdenomination) by maturity date of the Receipts, Coupons and Talons attachedthereto or surrendered therewith;
(f) the aggregate nominal amounts of Covered Bonds and Receipts and the aggregateamounts in respect of Coupons which have been so surrendered and replaced andthe serial numbers of such Covered Bonds in definitive form and the total number(where applicable, of each denomination) by maturity date of such Coupons andTalons;
(g) the total number (where applicable, of each denomination) by maturity date of theunmatured Coupons missing from Bearer Definitive Covered Bonds bearinginterest at a fixed rate which have been redeemed or surrendered and replaced andthe serial numbers of the Bearer Definitive Covered Bonds to which such missingunmatured Coupons appertained; and
(h) the total number (where applicable, of each denomination) by maturity date ofTalons which have been exchanged for further Coupons or Receipts,
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shall be given to the Bond Trustee by or on behalf of the Issuer as soon as possible and inany event within four months after the date of such redemption, purchase, payment,exchange or replacement (as the case may be). The Bond Trustee may accept suchcertificate as conclusive evidence of redemption, purchase or replacement pro tanto ofthe Covered Bonds or payment of interest thereon or exchange of the relative Talonsrespectively and of cancellation of the relative Covered Bonds, Receipts and Coupons.
6.2 The Issuer shall use its best efforts to procure (i) that the Issuing and Paying Agent shallkeep a full and complete record of all Covered Bonds, Receipts, Coupons and Talonsissued by it (other than serial numbers of Receipts and Coupons) and of their redemptionor purchase by or on behalf of the Issuer, any of its Subsidiaries or the Guarantor, anycancellation or any payment or exchange (as the case may be) of such Covered Bonds,Receipts, Coupons and Talons and of all replacement covered bonds, receipts, coupons ortalons issued in substitution for lost, stolen, mutilated, defaced or destroyed CoveredBonds, Receipts, Coupons or Talons and (ii) that such records and copies thereof shall bemade available to the Bond Trustee at all reasonable times.
7. Covered Bond Guarantee
7.1 (a) In consideration of the Advances to be made by the Issuer to the Guarantorpursuant to the Intercompany Loan Agreement, the payment of any ExcessProceeds to the Guarantor pursuant to Clause 11.2 and the payment by the Issuerto the Guarantor of the Guarantee Fee, the Guarantor unconditionally andirrevocably guarantees to the Bond Trustee, for the benefit of the CoveredBondholders, payment of the Guaranteed Amounts as and when the same becomeDue for Payment.
(b) The Guarantor shall, as guarantor:
(i) following the occurrence of a Covered Bond Guarantee Activation Event ,pay or procure to be paid on each Scheduled Payment Date (or on suchlater date provided for in Clause 8.1(b)) (in the manner described inClause 8) to or to the order of the Bond Trustee (for the benefit of theCovered Bondholders), an amount equal to those Guaranteed Amountswhich shall have become Due for Payment in accordance with the termshereof and of the Covered Bonds, but which have not been paid by theIssuer on the relevant date for payment (PROVIDED THAT, for greatercertainty, no Notice to Pay shall be so served until an Issuer AccelerationNotice has been served by the Bond Trustee on the Issuer in accordancewith Condition 7.01); and
(ii) following the service by the Bond Trustee of a Guarantor AccelerationNotice, in accordance with Condition 7.02, on the Issuer and theGuarantor, in respect of the Covered Bonds which have becomeimmediately due and repayable, pay or procure to be paid to or to the
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order of the Bond Trustee (for the benefit of the Covered Bondholders) inthe manner described in Clause 8.1, the Guaranteed Amounts,
(the “Covered Bond Guarantee”).
7.2 In relation to the Covered Bonds of each Series, the Covered Bond Guarantee:
(a) is a continuing guarantee;
(b) extends (in the case of the Guarantor) to the ultimate balance of the GuaranteedAmounts due to be paid by the Issuer on the relevant Scheduled Payment Dates inaccordance with the terms hereof, the Covered Bonds, the Receipts or theCoupons, regardless of any intermediate payment or discharge in whole or in partof any Guaranteed Amounts due to be paid on the relevant Scheduled PaymentDate;
(c) shall not be discharged except by complete performance of the obligations in thisTrust Deed, is additional to, and not instead of, any security or other guarantee orindemnity at any time existing in favour of any person (whether from theGuarantor or otherwise); and
(d) shall remain in force, in relation to the Covered Bond Guarantee, until all moneyspayable by the Guarantor pursuant to the terms of the Covered Bond Guaranteeshall have been irrevocably paid.
7.3 The Guarantor shall in respect of any payment due to be made pursuant hereto not bereleased from its obligations under or pursuant hereto in any circumstances(notwithstanding anything which but for this provision would release the Guarantor orwould affect its liability under or pursuant hereto in respect of such payment) exceptupon the receipt by or for the account of the Bond Trustee of the full amount of suchpayment from the Issuer and the Guarantor in the currency, at the place and in the mannerprovided for herein PROVIDED THAT (except in the case of Excess Proceeds) everypayment of principal, premium or interest in respect of the Covered Bonds, Receiptsand/or Coupons made to the Issuing and Paying Agent in the manner provided in theAgency Agreement shall be in satisfaction pro tanto of the liability of the Guarantorhereunder and shall be deemed for the purpose of this Clause 7.3 to have been paid to theorder of the Bond Trustee, except to the extent that the subsequent payment thereof to theCovered Bondholders, the Receiptholders or the Couponholders in accordance with theConditions is not made.
7.4 If any payment received by the Bond Trustee, the Issuing and Paying Agent or anyCovered Bondholder, Receiptholder or Couponholder pursuant to the provisions hereof,on the subsequent bankruptcy, sequestration, liquidation, insolvency, corporatereorganisation or other such similar event of the Issuer, the Guarantor or any of itsgeneral partners, be set aside or avoided in whole or in part under any laws relating tobankruptcy, sequestration, liquidation, insolvency, corporate reorganisation or other
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similar event, such payment shall not be considered as having discharged or diminishedthe liability of the Issuer or, as the case may be, the Guarantor and the Covered BondGuarantee shall continue to apply in accordance with its terms as if the underlyingpayment in respect of which the liability of the Guarantor hereunder arose had at all timesremained owing by such Issuer.
7.5 Without prejudice to the generality of the foregoing provisions of this Clause, theGuarantor agrees that if any or all of the Guaranteed Amounts are not duly paid by theIssuer and such Guaranteed Amounts are not recoverable under Clause 7.1 in accordancewith the terms of Clause 7.1, for any reason whatsoever, the Guarantor will, as a separateand distinct obligation, indemnify and save harmless the Bond Trustee, for the benefit ofthe Covered Bondholders, from any loss (excluding indirect or consequential losses)resulting from the failure of the Guarantor to pay such Guaranteed Amounts inaccordance with the terms of Clause 7.1 and if for any reason whatsoever, the BondTrustee, for the benefit of the Covered Bondholders, is not indemnified by the Guarantorin accordance with this Clause 7.5, the Guaranteed Amounts will be recoverable from theGuarantor in the manner set out in Clause 7.1, as a separate and distinct obligation of theGuarantor recoverable from the Guarantor, as if it were principal debtor and not merelyas surety or guarantor and shall be absolute and unconditional, irrespective of, andunaffected by, any invalidity, irregularity, illegality or unenforceability of, or defect in,any provisions hereof or any other Transaction Document (including any Covered Bond,Receipt or Coupon), or the absence of any action to enforce the same or the waiver,modification or consent by the Bond Trustee, any of the Covered Bondholders,Receiptholders or Couponholders in respect of any provisions of the same or theobtaining of any judgment or decree against the Issuer or any action to enforce the sameor any other circumstances which might otherwise constitute a legal or equitabledischarge or defence of a guarantor. Accordingly, the validity of the Covered BondGuarantee shall not be affected by any invalidity, irregularity or unenforceability of all orany of the obligations of the Issuer hereunder or any other Transaction Document and theCovered Bond Guarantee shall not be discharged nor shall the liability of the Guarantorhereunder be affected by any act, thing or omission or means whatsoever whereby itsliability would not have been discharged if it had been guarantor, indemnitor or principaldebtor.
7.6 The liability of the Guarantor under the Covered Bond Guarantee shall not be lessened,affected, impaired or discharged by:
(a) any time, waiver or indulgence granted to the Issuer by the Bond Trustee, any ofthe Covered Bondholders, the Receiptholders or Couponholders;
(b) any dealings or transactions between the Issuer and the Bond Trustee, any of theCovered Bondholders, Receiptholders or Couponholders whether or not theGuarantor shall be a party to or cognisant of the same;
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(c) the dissolution of the Issuer or any change in the status, functions, control orownership of the Issuer or any consolidation, amalgamation, merger, conveyanceor transfer by the Issuer;
(d) any composition, compromise or arrangement between the Issuer and its creditorsor any reorganization or restructuring of its business and affairs or any InsolvencyEvent regarding the Issuer;
(e) the taking, variation, compromise, exchange, renewal or release of, or refusal orneglect to perfect, take up or enforce, any rights against, or security over assets of,the Issuer or any other person or any non presentation or non observance of anyformality or other requirement in respect of any instrument or any failure torealise the full value of any security;
(f) any incapacity or lack of powers, authority or legal personality of the Issuer orany other person;
(g) any variation (however fundamental) or replacement of this Trust Deed, theCovered Bonds, the Receipts or the Coupons;
(h) any failure on the part of the Issuer to pay all or any part of any guarantee feepayable by it to the Guarantor in connection herewith or any other TransactionDocument;
(i) any postponement, discharge, reduction, non provability or other similarcircumstance affecting any obligation of the Issuer hereunder or any otherTransaction Document resulting from any insolvency, liquidation or dissolutionproceedings or from any law, regulation or order so that each such obligation shallfor the purposes of the Guarantor’s obligations under the Covered BondGuarantee be construed as if there were no such circumstance;
(j) any modification or amendment of or supplement to the Guaranteed Amounts,including any increase or decrease in the principal, the rates of interest or otheramounts payable thereunder;
(k) the existence of any claim, set-off or other rights which the Guarantor may haveat any time against the Issuer, the Bond Trustee or any other Person, whether inconnection herewith or any unrelated transactions;
(l) any limitation, postponement, prohibition, subordination or other restriction onthe rights of the Bond Trustee or any Covered Bondholder, Receiptholder orCouponholder to payment of the Guaranteed Amounts;
(m) any release, substitution or addition of any cosigner, endorser or other guarantorof the Guaranteed Amounts;
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(n) any defence arising by reason of any failure of the Bond Trustee or any CoveredBondholder, Receiptholder or Couponholder, to make any presentment, demandfor performance, notice of non-performance, protest, and any other notice,including notice of all of the following: acceptance of this Covered BondGuarantee, partial payment or non-payment of all or any part of the GuaranteedAmounts and the existence, creation or incurring of new or additional GuaranteedAmounts;
(o) any defence arising by reason of any failure of the Bond Trustee or any CoveredBondholder, Receiptholder or Couponholder to proceed against the Issuer or anyother person, to proceed against, apply or exhaust any security held from theIssuer or any other person for the Guaranteed Amounts, to proceed against, applyor exhaust any security held from the Guarantor or any other person for thisCovered Bond Guarantee or to pursue any other remedy in the power of the BondTrustee or any Covered Bondholder, Receiptholder or Couponholder whatsoever;
(p) any law which provides that the obligation of a guarantor must neither be larger inamount nor in other respects more burdensome than that of the principalobligation or which reduces a guarantor’s obligation in proportion to the principalobligation;
(q) any defence arising by reason of any limitation, postponement or prohibition onthe Bond Trustee’s right, or the right of any Covered Bondholder, Receiptholderor Couponholder, to payment of the Guaranteed Amounts or any part thereof, orby reason of the cessation from any cause whatsoever of the liability of the Issueror any other person with respect to all or any part of the Guaranteed Amounts, orby reason of any act or omission of the Bond Trustee or any Covered Bondholder,Receiptholder or Couponholder or others which directly or indirectly results in thedischarge or release of the Issuer or any other person or all or any part of theGuaranteed Amounts or any security or guarantee therefor, whether by contract,operation of law or otherwise;
(r) any defence arising by reason of any interest of the Bond Trustee or any CoveredBondholder, Receiptholder or Couponholder in any property, whether as ownerthereof or the holder of a security interest therein or lien or encumbrance thereon,being invalidated, voided, declared fraudulent or preferential or otherwise setaside, or by reason of any impairment by the Bond Trustee of any right torecourse or collateral;
(s) any defence arising by reason of the failure of the Bond Trustee or any CoveredBondholder, Receiptholder or Couponholder to marshall any assets;
(t) any defence based upon any failure of the Bond Trustee or any CoveredBondholder, Receiptholder or Couponholder to give to the Issuer or the Guarantornotice of any sale or other disposition of any property securing any or all of the
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Guaranteed Amounts or any guarantee thereof, or any defect in any notice thatmay be given in connection with any sale or other disposition of any suchproperty, or any failure of the Bond Trustee or any Covered Bondholder,Receiptholder or Couponholder to comply with any provision of applicable law inenforcing any security interest in or lien upon any such property, including anyfailure by the Bond Trustee to dispose of any such property in a commerciallyreasonable manner;
(u) any dealing whatsoever with any security, whether negligently or not, or anyfailure to do so;
(v) any defence based upon or arising out of any bankruptcy, insolvency,reorganization, moratorium, arrangement, readjustment of debt, liquidation ordissolution proceeding commenced by or against the Issuer or any other person,including any discharge of, or bar against collecting, any of the GuaranteedAmounts, in or as a result of any such proceeding; or
(w) any other act or omission to act or delay of any kind by the Issuer, the BondTrustee, any Covered Bondholder, Receiptholder or Couponholder or any otherperson or any other circumstance whatsoever, whether similar or dissimilar to theforegoing, which might, but for the provisions of this Clause 7.6, constitute alegal or equitable discharge, limitation or reduction of the Guarantor’s obligationshereunder (other than the Guaranteed Amounts).
7.7 Subject to its obligation to deliver a Notice to Pay, the Bond Trustee may determine fromtime to time whether it will enforce the Covered Bond Guarantee which it is entitled toenforce, without making any demand or taking any proceedings against the Issuer.Subject to the provisions of this Clause 7 with regard to the service of a Notice to Pay onthe Guarantor, the Guarantor hereby waives any right to require proceedings first againstthe Issuer with respect to this Trust Deed, the Covered Bonds, Receipts or Coupons,diligence, presentment, demand of payment, filing of claims with a court in the event ofdissolution, liquidation, merger or bankruptcy of the Issuer, protest or notice and alldemands whatsoever.
7.8 To the extent that the Guarantor makes, or there is made on its behalf, a payment underthe Covered Bond Guarantee, the Issuer will on such payment being made becomeindebted to the Guarantor for an amount equal to such payment unless such amount shallhave been set-off with amounts owing under the Intercompany Loan Agreement. Until allamounts which may be or become payable by the Issuer hereunder, the Covered Bonds,Receipts and/or Coupons have been irrevocably paid in full, the Guarantor hereby waivesirrevocably and unconditionally:
(a) all rights of subrogation, indemnity, contribution or otherwise (arising under thisClause 7.8(i) or under common law, equity, statute or otherwise whatsoever)
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which it might otherwise have against the Issuer by virtue of any payment madeby the Guarantor pursuant to the Covered Bond Guarantee; and
(b) all rights to claim, rank, prove or vote as creditor of the Issuer or its estate incompetition with the Bond Trustee (on behalf of the Covered Bondholders) or toclaim a right of set-off,
subject always to the rights of the Guarantor to set-off amounts owing by the Issuer to theGuarantor, in accordance with the Priorities of Payments, (x) in respect of amounts paidby the Guarantor under the Covered Bond Guarantee, against any amounts repayable bythe Guarantor under the terms of the Intercompany Loan Agreement, and (y) againstamounts payable by the Guarantor to any Swap Provider (provided that such SwapProvider is the Issuer) under the terms of any Interest Rate Swap Transaction or CoveredBond Swap Transaction, which shall remain unaffected.
7.9 Any amounts from time to time received by the Bond Trustee under the Covered BondGuarantee shall be applied by the Bond Trustee in accordance with the provisions ofClause 11.1 PROVIDED THAT any Excess Proceeds received by the Bond Trustee shallbe applied by the Bond Trustee in accordance with the provisions of Clause 11.2.
8. Payments Under the Covered Bond Guarantee
8.1 (a) The Issuer shall notify the Bond Trustee in writing (copied to the Guarantor), nolater than close of business on the fifth Canadian Business Day before eachInterest Payment Date, of the amount of Scheduled Interest and/or ScheduledPrincipal which is due and payable by the Issuer on such Interest Payment Dateand shall confirm whether or not it shall have sufficient funds to make suchpayments of Scheduled Interest and/or Scheduled Principal on such InterestPayment Date. If the amount available for payment by the Issuer in respect ofScheduled Interest and/or Scheduled Principal on such Interest Payment Date willbe insufficient to meet the amount of Scheduled Interest and/or ScheduledPrincipal due and payable on such Interest Payment Date (the “Shortfall”), theIssuer shall inform the Bond Trustee in writing (copied to the Guarantor) of theamount of the Shortfall. Following the occurrence of an Issuer Event of Defaultand service by the Bond Trustee of an Issuer Acceleration Notice on the Issuerpursuant to Condition 7.01, the Bond Trustee shall promptly deliver a Notice toPay to the Issuer and the Guarantor with a copy to the Issuing and Paying Agentrequiring the Guarantor to pay the Guaranteed Amounts on the later of (i) the daywhich is two Canadian Business Days after service of the Notice to Pay on theGuarantor; and (ii) the date on which the Guaranteed Amounts would otherwisebe Due for Payment.
(b) Following the service by the Bond Trustee of an Issuer Acceleration Notice on theIssuer and the service by the Bond Trustee of a Notice to Pay on the Guarantorbut prior to a Guarantor Event of Default and delivery by the Bond Trustee of a
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Guarantor Acceleration Notice, payment by the Guarantor of the GuaranteedAmounts pursuant to the Covered Bond Guarantee shall be made in accordancewith the Guarantee Priority of Payments set out in Section 6.4 of the GuarantorAgreement by noon (local time in the relevant financial centre of the payment or,in the case of a payment in euro, London time) on the later of (i) the secondCanadian Business Day following service of a Notice to Pay on the Guarantor;and (ii) the Scheduled Payment Date on which the relevant Guaranteed Amount isDue for Payment.
8.2 The Bond Trustee shall direct the Guarantor to pay (or to procure the payment of) allsums payable under the Covered Bond Guarantee to the Issuing and Paying Agent subjectalways to the provisions of Clause 2.3.
8.3 At least one Business Day before the date on which the Guarantor is obliged to make apayment under the Covered Bond Guarantee, it shall notify or procure the notification ofthe Issuing and Paying Agent of the irrevocable instructions to the Account Bank throughwhich payment to the Issuing and Paying Agent is to be made.
8.4 All payments of Guaranteed Amounts by or on behalf of the Guarantor will be madewithout withholding or deduction for, or on account of, any present or future tax, duties,assessment or other governmental charges of whatever nature, imposed or levied by or onbehalf of Canada or any province or territory thereof, or in the case of Covered Bondsissued by a branch of the Issuer located outside Canada, the country in which such branchis located, or any political subdivision thereof or any authority or agency therein orthereof having power to tax, unless the withholding or deduction of such taxes, duties,assessments or governmental charges is required by law. In that event, the Guarantor willnot pay any additional amounts to the Bond Trustee or any holder of Covered Bonds,Receipts and/or Coupons in respect of the amount of such withholding or deduction. Ifany such withholding or deduction is required, the Guarantor shall pay the GuaranteedAmounts net of such withholding or deduction and shall account to the appropriate taxauthority for the amount required to be withheld or deducted. In the event that suchwithholding or deduction is required, the Issuer shall be required to pay such additionalamounts as will result in the holders of Covered Bonds, Receipts or Coupons receivingsuch amounts as they would have received in respect of such Covered Bonds or Couponshad no such withholding or deduction been required in accordance with Condition 8.01.
8.5 The Issuer shall not be discharged from its obligations under the Covered Bonds,Receipts or Coupons and this Trust Deed by any payment made by the Guarantor underthe Covered Bond Guarantee PROVIDED THAT this Clause 8.5 shall operate only forthe purpose of the subrogation rights of the Guarantor contemplated by Clause 7.8.
8.6 Except in relation to Excess Proceeds, any payment made by the Guarantor to theCovered Bondholders, Receiptholders or the Couponholders in respect of the CoveredBonds, Receipts or Coupons may be made in accordance with the Conditions and theAgency Agreement, and any payments so made shall be a good discharge pro tanto of the
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relative covenant by the Guarantor (as the case may be) contained in Clauses 7 or 8 (asthe case may be) save to the extent that there is default in the subsequent payment thereofin accordance with the trust presents to the relevant Covered Bondholders,Receiptholders or Couponholders (as the case may be).
9. Non Payment
Proof that with respect to any specified Covered Bond, Receipt or Coupon the Issuer or,as the case may be, the Guarantor has made default in paying any amount due in respectof such Covered Bond, Receipt or Coupon shall (unless the contrary be proved) besufficient evidence that the same default has been made as regards all other CoveredBonds, Receipts or Coupons (as the case may be) in respect of which the relevant amountis due and payable.
10. Proceedings, Action and Indemnification
10.1 The Bond Trustee may at any time after an Issuer Acceleration Notice (in the case of theIssuer) or a Guarantor Acceleration Notice (in the case of the Guarantor), at its discretionand without further notice, take such proceedings as it may think fit against or in relationto the Issuer or, as the case may be, the Guarantor to enforce the provisions of this TrustDeed, the Covered Bonds, the Receipts and the Coupons. However, the Bond Trusteeshall not be bound to take any such enforcement proceedings in relation to this TrustDeed, the Covered Bonds, the Receipts, the Coupons or any other Transaction Documentunless directed or requested to do so (i) by an Extraordinary Resolution (with theCovered Bonds of all Series taken together as a single Series as provided in Clause 2.7)or (ii) in writing by the holders of not less than twenty five per cent. of the PrincipalAmount Outstanding of the Covered Bonds then outstanding (with the Covered Bonds ofall Series taken together as a single Series as aforesaid) and in either case then only if itshall be indemnified and/or secured to its satisfaction against all Liabilities to which itmay thereby render itself liable or which it may incur by so doing.
10.2 Subject to Clause 10.1, the Bond Trustee shall not be bound to take any other actionhereunder or any other Transaction Document unless directed or requested to do so (i) byan Extraordinary Resolution of the Covered Bondholders of the relevant one or moreSeries or (ii) in writing by the holders of not less than twenty five per cent. of thePrincipal Amount Outstanding of the Covered Bonds of the relevant one or more Series,and in either case then only if it shall be indemnified and/or secured to its satisfactionagainst all Liabilities to which it may thereby render itself liable or which it may incur byso doing.
10.3 Only the Bond Trustee may enforce the provisions hereof. No Covered Bondholder,Receiptholder or Couponholder shall be entitled to proceed directly against the Issuer orthe Guarantor to enforce the performance of any of the provisions hereof or to directlyenforce the provisions of the Security Agreement or any other Transaction Documentunless the Bond Trustee having become bound as aforesaid to take proceedings fails to do
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so within 30 days and such failure is continuing (in which case each of such CoveredBondholder, Receiptholder or Couponholder shall be entitled to take any such steps andproceedings as it shall deem necessary other than the presentation of a petition for thewinding up of, or for an administration order or liquidation in respect of, the Issuer, theGuarantor or any of the General Partners).
11. Application of Moneys
11.1 All moneys (other than Excess Proceeds which shall be applied in the manner set out inClause 11.2 below) received by the Bond Trustee hereunder from the Issuer or, as thecase may be, the Guarantor or any administrator, administrative receiver, receiver,liquidator, trustee in sequestration or other similar official appointed in relation to theIssuer or the Guarantor (including any moneys which represent principal or interest inrespect of Covered Bonds, Receipts or Coupons which have become void or in respect ofwhich claims have become prescribed under Condition 10 (Prescription) and includingthe proceeds of any enforcement of the Security) shall, unless and to the extentattributable, in the opinion of the Bond Trustee and only as expressly permitted by theCMHC Guide, to a particular Series of the Covered Bonds, be apportioned pari passu andrateably between each Series of the Covered Bonds, and all moneys received by the BondTrustee hereunder from the Issuer or, as the case may be, the Guarantor to the extentattributable, in the opinion of the Bond Trustee and only as expressly permitted by theCMHC Guide, to a particular Series of the Covered Bonds or which are apportioned tosuch Series as aforesaid, be held by the Bond Trustee upon trust to apply them:
FIRST (except in relation to any such moneys received by the Bond Trustee followingthe occurrence of an Issuer Event of Default and the service by the Bond Trustee of anIssuer Acceleration Notice and a Notice to Pay) in payment or satisfaction of all amountsthen due and unpaid under Clauses 17 and/or 18(j) to the Bond Trustee and/or anyAppointee;
SECONDLY in or towards payment pari passu and rateably of all principal and interestthen due and unpaid in respect of the Covered Bonds of that Series;
THIRDLY in or towards payment pari passu and rateably of all principal and interestthen due and unpaid in respect of the Covered Bonds of each other Series; and
FOURTHLY in payment of the balance (if any) to the Issuer (to the extent received fromthe Issuer) or the Guarantor (if received from the Guarantor).
Without prejudice to this Clause 11.1, if the Bond Trustee holds any moneys (other thanExcess Proceeds) which represent principal or interest in respect of Covered Bonds whichhave become void or in respect of which claims have been prescribed under Condition 10(Prescription), the Bond Trustee will hold such moneys on the above trusts.
11.2 (a) Following the occurrence of an Issuer Event of Default and the delivery of anIssuer Acceleration Notice, any moneys received by the Bond Trustee from the
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Issuer or any administrator, administrative receiver, receiver, liquidator, trustee insequestration or other similar official appointed in relation to the Issuer (the“Excess Proceeds”) shall be paid by the Bond Trustee on behalf of the CoveredBondholders of the relevant Series to the Guarantor (or the Cash Manager on itsbehalf) for the account of the Guarantor, as soon as practicable, and shall be heldby the Guarantor in the Guarantor Accounts and the Excess Proceeds shallthereafter form part of the Security and shall be paid and used by the Guarantor(or the Cash Manager on its behalf) in the same manner as all other moneys fromtime to time held by the Cash Manager and/or standing to the credit of theGuarantor in the Guarantor Accounts. Any Excess Proceeds received by the BondTrustee shall discharge the obligations of the Issuer in respect of the CoveredBonds, Receipts and Coupons (to the extent of the amount so received) (subject torestitution of the same if such Excess Proceeds will be required to be repaid bythe Guarantor as contemplated by Clause 7.8). However, the obligations of theGuarantor under the Covered Bond Guarantee are direct and, following a CoveredBond Guarantee Activation Event, unconditional and irrevocable and the receiptby the Bond Trustee of any Excess Proceeds shall not reduce or discharge anysuch obligations.
(b) By subscribing for Covered Bond(s), each Covered Bondholder shall be deemedto have irrevocably directed the Bond Trustee to pay the Excess Proceeds to theGuarantor in the manner as described above.
(c) For the avoidance of doubt, any payments by the Guarantor to the CoveredBondholders out of the Excess Proceeds, shall reduce the Guaranteed Amountspro tanto.
12. Notice of Payments
The Bond Trustee shall give notice to the relevant Covered Bondholders in accordancewith Condition 14 (Notices) of the day fixed for any payment to them under Clause 11.1.Such payment may be made in accordance with Condition 9 (Payments) and any paymentso made shall be a good discharge to the Bond Trustee.
13. Partial Payments
Upon any payment under Clause 11.1 (other than payment in full against surrender of aCovered Bond, Receipt or Coupon) the Covered Bond, Receipt or Coupon in respect ofwhich such payment is made shall be produced to the Bond Trustee, the Paying Agent orthe Registrar by or through whom such payment is made and the Bond Trustee shall orshall cause the Paying Agent or, as the case may be, such Registrar to enface thereon amemorandum of the amount and the date of payment but the Trustee may in anyparticular case and generally in relation to Registered Covered Bonds dispense with suchproduction and enfacement upon such indemnity being given as it shall think sufficient.
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14. Covenants by the Issuer
The Issuer hereby covenants with the Bond Trustee that, so long as any of the CoveredBonds remain outstanding, the maximum Asset Percentage shall be 93 per cent.
15. Covenants by the Issuer and the Guarantor
15.1 Each of the Issuer and the Guarantor hereby covenants with the Bond Trustee that, solong as any of the Covered Bonds remains outstanding, it will:
(a) at all times maintain an Issuing and Paying Agent, Registrar, Exchange Agent,Transfer Agent and other Paying Agents with specified offices in accordance withthe Conditions and at all times maintain any other agents required by theConditions;
(b) give notice in writing to the Bond Trustee of the occurrence of any Issuer Eventof Default or Potential Issuer Event of Default or Guarantor Event of Default orPotential Guarantor Event of Default (as applicable) without waiting for the BondTrustee to take any further action;
(c) at all times keep proper books of account;
(d) give to the Bond Trustee at all times such information as it shall reasonablyrequire for the purpose of the discharge of the duties, powers, trusts, authoritiesand discretions vested in it hereunder or by operation of law provided always thatthe foregoing shall not oblige the Issuer or the Guarantor to give any informationnon disclosure of which is required by any applicable law;
(e) if requested by the Bond Trustee, and unless publicly available, send to the BondTrustee (if same are produced) (i) as promptly as practicable after the time ofissue or publication thereof and in any event within 180 days after the end of eachof its financial years (or financial periods, as appropriate, in the event of a changeof accounting reference date) two copies (by email) (in addition to any copies towhich it may be entitled as a holder of any security in or of any Issuer orGuarantor) in the English language of each report and accounts for the relevantfinancial year/financial period (as appropriate) containing a balance sheet andprofit and loss account of the Issuer; (ii) in the case of the Issuer only, as promptlyas practicable after the issue or publication thereof two copies (by email) of everybalance sheet, profit and loss account, report or other notice, statement or circularissued to the shareholders of the Issuer in their capacity as such; and (iii) upon theexecution hereof and thereafter forthwith upon any change of the same a list ofthe Authorized Signatories of the Issuer, or as the case may be, the Guarantor,however, there shall be no obligation upon the Bond Trustee to review anyfinancial statement, report, balance sheet, profit and loss account, report or othernotice received by the Bond Trustee pursuant to this paragraph (e) of Clause 15;
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(f) so far as permitted by law at all times execute all such further documents and doall such further acts and things as may be necessary at any time or times in thereasonable opinion of the Bond Trustee to give effect to the terms and conditionsof the trust presents;
(g) procure that the Issuing and Paying Agent or the Registrar, as the case may be,notifies the Bond Trustee forthwith in the event that it does not, on or before thedue date for payment in respect of the Covered Bonds or any of them or in respectof the Receipts (if any) and/or the Coupons (if any), receive unconditionally in themanner provided by the Agency Agreement the full amount of the moneyspayable on such due date on all such Covered Bonds, Receipts or, as the case maybe, all such Coupons;
(h) in relation to any Covered Bonds agreed by the Issuer and the relevant Dealer tobe listed and admitted to trading on any Stock Exchanges(s), use all reasonableefforts to procure the admission of the relevant Covered Bonds to listing andtrading on such Stock Exchange(s) and to maintain the same until none of theCovered Bonds of the relevant Series is outstanding provided that, if it should beimpracticable or unduly burdensome to maintain any such listing, the Issuer shalluse all reasonable efforts to procure and maintain as aforesaid a listing or aquotation for the relevant Covered Bonds on such other Stock Exchange(s) as itand the relevant Dealer(s) may reasonably agree. However, if such alternativelisting is not available or is, in the opinion of the Issuer, impractical or undulyburdensome, an alternative listing for such Covered Bonds may not be obtained;
(i) observe and comply with its obligations, and use all reasonable endeavours toprocure that the Paying Agents, Transfer Agent, Registrar, Exchange Agent andCalculation Agent observe and comply with all their respective obligations underthe Agency Agreement and not modify or amend the same without the previousconsent in writing of the Bond Trustee;
(j) send to the Bond Trustee a copy of the form of any notice to be given to theCovered Bondholders in accordance with Condition 14 (Notices) and, uponpublication, two copies of such notice, such notice being in the form approved bythe Bond Trustee (such approval not to be unreasonably withheld or delayed and,unless so expressed, not to constitute approval for the purposes of Section 21 ofthe FSMA of a communication within the meaning of Section 21);
(k) send or procure to be sent to the Bond Trustee at the time of delivery to the BondTrustee of the Issuer’s report and accounts pursuant to paragraph (e)(i) of thisClause, if so required, and within 30 days after any request by the Bond Trustee, acertificate signed by two Authorized Signatories of the Issuer or, as the case maybe, the Guarantor certifying that, to the best of their knowledge and belief aftermaking all reasonable enquiries, (i) during such financial year (or financialperiod, as appropriate, in the event of a change of accounting reference date) (or
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during such period as the Bond Trustee may reasonably specify in such request)and since the completion thereof and up to a specified date not earlier than 10days prior to the date of such certificate, the Issuer or, as the case may be, theGuarantor has complied with its material obligations hereunder and under theAgency Agreement and the other Transaction Documents or (if such is not thecase) giving details of the circumstances of such non compliance and (ii) withoutprejudice to the generality of this paragraph (k) or of paragraph (b) of this Clausethere did not exist on the part of the Issuer, or as the case may be, the Guarantor,as at the date mentioned in (i) above, any Issuer Event of Default or PotentialIssuer Event of Default or Guarantor Event of Default or Potential GuarantorEvent of Default (as applicable) or, if any Issuer Event of Default or PotentialIssuer Event of Default or Guarantor Event of Default or Potential GuarantorEvent of Default (as applicable) exists, giving details of the same;
(l) in the event of the unconditional payment to the Issuing and Paying Agent or theBond Trustee (in any case) of any sum due in respect of principal, redemptionamount, premium (if any) and/or interest on the Covered Bonds of such Series orany of them being made after the due date for payment thereof, forthwith give orprocure the Issuing and Paying Agent to give notice to the Covered Bondholdersof such Series in accordance with Condition 14 (Notices) that such payment hasbeen made;
(m) if while any of the Covered Bonds remains outstanding the Issuer shall becomesubject generally to the taxing jurisdiction of any territory or any authority orpolitical sub division therein or thereof having power to tax other than or inaddition to Canada or the country in which the relevant branch is located, unlessthe Bond Trustee otherwise agrees, the Issuer shall give to the Bond Trusteenotice forthwith upon becoming aware thereof and, as soon as practicablethereafter, an undertaking or covenant in form and substance and mannersatisfactory to the Bond Trustee in terms corresponding to the relevant Condition8 (Taxation) or Clause 8.4 (as the case may be) with the substitution for (or, as thecase may be, addition to) the references therein to Canada or the country in whichthe relevant branch is located to that other or additional territory or any authorityor political sub division therein or thereof having power to tax to whose taxingjurisdiction such Issuer shall have become subject as aforesaid and, where suchundertaking or covenant is provided, references in Condition 6.02 (EarlyRedemption for Taxation Reasons) to Canada or the country in which the relevantbranch is located shall be deemed to be amended accordingly;
(n) give notice to the Covered Bondholders in accordance with the Conditions of anyappointment (other than the initial appointment), resignation or removal of anyPaying Agent, Calculation Agent, Registrar, Exchange Agent or Transfer Agentas shown on the Covered Bonds or so published in accordance with theConditions as soon as practicable and in any event within 14 days after such eventtaking effect and within 30 days of notice received from a Paying Agent,
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Calculation Agent, Registrar, Exchange Agent or Transfer Agent of a change inits specified office, give notice to the Bond Trustee and to the CoveredBondholders of such change PROVIDED ALWAYS THAT in the case of thetermination at any time of the appointment of (i) the Issuing and Paying Agent or,in the case of Registered Covered Bonds, the Registrar, (ii) the only remainingPaying Agent with its specified office in a continental European city, (iii) the onlyremaining Paying Agent in a member state of the European Union that is notobliged to withhold or deduct tax pursuant to European Council Directive2003/48/EC or any law implementing or complying with, or introduced in orderto conform to, such Directive (iv) (so long as the Covered Bonds are admitted tothe official list of the UK Listing Authority and to trading on the London StockExchange and/or admitted to listing or trading on any other stock exchange orrelevant authority) the Paying Agent (in the case of Bearer Covered Bonds) orTransfer Agent (in the case of Registered Covered Bonds), which may in eithercase be the Issuing and Paying Agent or the Registrar, with its specified office inLondon and/or in such other place as may be required by the rules of such otherstock exchange or other relevant authority, (v) in the circumstances described inCondition 9.4, the Paying Agent with a specified office in New York City,(vi) where required by the Conditions applicable to any Covered Bonds, theCalculation Agent or (vii) so long as any of the Registered Global Covered Bondspayable in a Specified Currency other than U.S. dollars are held through DTC orits nominee, the Exchange Agent with a specified office in New York City, nosuch termination shall take effect until a successor thereto has been appointed andnotice of such appointment has been given to the Covered Bondholders inaccordance with the Conditions;
(o) in order to enable the Bond Trustee to ascertain the amount of Covered Bonds ofeach Series for the time being outstanding (other than for the purpose ofascertaining the amount of Covered Bonds of each Series for the time beingoutstanding for the purpose of the Programme Limit), deliver to the Bond Trusteeforthwith after being so requested in writing by the Bond Trustee a certificate inwriting signed by any two Authorized Signatories setting out the total numbersand aggregate nominal amount of Covered Bonds of each Series which up to andincluding the date of such certificate have been purchased by or for the account ofthe Issuer or the Guarantor, the aggregate nominal amount of Covered Bonds ofeach Series which are held beneficially at such date by the Issuer or theGuarantor, and the aggregate nominal amount of Covered Bonds of each Series sopurchased which have been cancelled;
(p) ensure that each Covered Bond to be issued or other transactions to be effectedhereunder shall comply with all applicable laws and regulations of anygovernmental or other regulatory authority of the country of any relevant currencyfor the purposes of any relevant Covered Bond and that all necessary consents andapprovals of, and registrations and filings with, any such authority in connectiontherewith are obtained and maintained in full force and effect;
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(q) if it intends to redeem all or any of the Covered Bonds prior to their statedmaturity date (if any) not less than 7 days prior to the latest date for thepublication of the notice of redemption required to be given to the Holders of anyCovered Bonds, give written notice of such intention to the Issuing and PayingAgent and the Bond Trustee stating the date on which such Covered Bonds are tobe redeemed and whether the relevant Series of Covered Bonds is to be redeemedin part only; and
(r) furnish, upon the request of a holder of Covered Bonds or any beneficial interesttherein, to such holder or to a prospective purchaser designated by such holder orbeneficial owner, the information required to be delivered under Rule 144A(d)(4)under the Securities Act if, at the time of the request, the Issuer or the Guarantoris neither a reporting company under Section 13 or 15(d) of the U.S. SecuritiesExchange Act of 1934, as amended, nor exempt from reporting pursuant to Rule12g2-3(b) thereunder.
16. Representations, Warranties and Covenants of the Bond Trustee
The Bond Trustee hereby represents and warrants to, and covenants with, each of theCash Manager and the Guarantor at the date hereof, and so long as it remains the BondTrustee, that:
(a) it possesses the necessary experience, qualifications, facilities and other resourcesto perform its responsibilities under this Trust Deed and the other TransactionDocuments to which it is a party and it will devote all due skill, care and diligenceto the performance of its obligations and the exercise of its discretions hereunder;
(b) it will comply with the provisions of, and perform its obligations under, this TrustDeed, the other Transaction Documents to which it is a party and the CMHCGuide;
(c) it is and will continue to be in good standing with OSFI;
(d) it is and will continue to be in material compliance with its internal policies andprocedures relevant to the services to be provided by it pursuant to this TrustDeed and the other Transaction Documents to which it is a party; and
(e) it is and will continue to be in material compliance with all laws, regulations andrules applicable to it in relation to the services provided by it pursuant to thisTrust Deed and the other Transaction Documents to which it is a party.
17. Remuneration and Indemnification of Bond Trustee
17.1 The Issuer (failing which, and, following an Issuer Event of Default and service of aNotice to Pay to the Guarantor, the Guarantor) shall pay to the Bond Trustee, by way ofremuneration for its services as Bond Trustee hereunder, such amount as shall be agreed
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from time to time by exchange of letters between the Issuer, the Guarantor and the BondTrustee. Such remuneration shall accrue from day to day and be payable (in priority topayments to Covered Bondholders, Receiptholders and Couponholders and any otherSecured Creditors) up to and including the date when all the Covered Bonds havingbecome due for redemption, the redemption moneys and interest thereon to the date ofredemption have been paid to the Issuing and Paying Agent or the Bond TrusteePROVIDED THAT if upon due presentation of any Covered Bond, Receipt or Coupon orany cheque payment of the moneys due in respect thereof is improperly withheld orrefused, remuneration will be deemed not to have ceased to accrue and will continue toaccrue until payment to such Covered Bondholder, Receiptholder or Couponholder isduly made.
17.2 In the event of the occurrence of an Issuer Event of Default, Guarantor Event of Default,Potential Issuer Event of Default or Potential Guarantor Event of Default or the BondTrustee considering it expedient or necessary or being requested by the Issuer or theGuarantor (as the case may be) to undertake duties which the Bond Trustee and the Issueror the Guarantor agree to be of an exceptional nature or otherwise outside the scope ofthe normal duties of the Bond Trustee hereunder the Issuer or the Guarantor shall pay tothe Bond Trustee such additional remuneration as shall be agreed between them.
17.3 The Issuer (failing which, and, following an Issuer Event of Default and service of aNotice to Pay to the Guarantor, the Guarantor) shall in addition pay to the Bond Trusteean amount equal to the amount of any GST or similar tax chargeable in respect of itsremuneration hereunder subject to receipt of a proper GST (or similar tax) invoice.
17.4 In the event of the Bond Trustee and the Issuer (failing which, and, following any IssuerEvent of Default and service of a Notice to Pay to the Guarantor, the Guarantor) failing toagree:
(a) (in a case to which Clause 17.1 above applies) upon the amount of theremuneration; or
(b) (in a case to which Clause 17.2 above applies) upon whether such duties shall beof an exceptional nature or otherwise outside the scope of the normal duties of theBond Trustee hereunder, or upon such additional remuneration,
such matters shall be determined by an investment bank (acting as an expert and not as anarbitrator) selected by the Bond Trustee and approved by the Issuer or the Guarantor or,failing such approval, nominated (on the application of the Bond Trustee) by the ChiefExecutive Officer of the Investment Dealers Association of Canada (the expensesinvolved in such nomination and the fees of such investment bank being payable by theIssuer or the Guarantor) and the determination of any such investment bank shall be finaland binding upon the Bond Trustee and the Issuer or the Guarantor.
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17.5 The Issuer (failing which, and, following any Issuer Event of Default and service of aNotice to Pay to the Guarantor, the Guarantor) shall also pay or discharge all Liabilitiesproperly incurred by the Bond Trustee in relation to the negotiation, preparation andexecution of the exercise of its powers and the performance of its duties hereunder andany other Transaction Document to which the Bond Trustee is a party paid or payable bythe Bond Trustee in connection with any action taken by or on behalf of the Bond Trusteefor enforcing this Trust Deed or any other Transaction Documents to which it is a party.
17.6 All amounts payable pursuant to Clause 17.5 above and/or Clause 18(j) shall be payableby the Issuer (failing which, and, following any Issuer Event of Default and service of aNotice to Pay to the Guarantor, the Guarantor) on the date specified in a demand by theBond Trustee and in the case of payments actually made by the Bond Trustee prior tosuch demand shall (if not paid within five days after such demand and the Bond Trusteeso requires) carry interest at the reasonable prevailing rate charged by the Bond Trusteefrom time to time from the date specified in such demand, and in all other cases shall (ifnot paid on the date specified in such demand or, if later, within five days after suchdemand and, in either case, the Bond Trustee so requires) carry interest at such rate fromthe date specified in such demand. All remuneration payable to the Bond Trustee shallcarry interest at such rate from the due date therefor.
17.7 Unless otherwise specifically stated in any discharge hereof the provisions of this Clause,Clause 18(j) and Clause 23 shall continue in full force and effect in relation to the periodduring which the Bond Trustee was bond trustee hereunder notwithstanding suchdischarge and whether or not the Bond Trustee is then the bond trustee hereunder.
17.8 The Bond Trustee shall be entitled in its absolute discretion to determine in respect ofwhich Series of Covered Bonds any Liabilities incurred hereunder have been incurred orto allocate any such Liabilities between the Covered Bonds of any Series.
18. Powers of the Bond Trustee
Where there are any inconsistencies between the other Transaction Documents and theprovisions hereof, the provisions hereof shall, to the extent allowed by law, prevail. Inaddition to any powers conferred by this Trust Deed or which the Bond Trustee may haveby virtue of any present or future statute or rule of law, the Bond Trustee shall have thefollowing powers:
(a) The Bond Trustee may in relation hereto and the other Transaction Documentsrely and/or act on the advice or report or opinion of or any information obtainedfrom any Auditor, lawyer, valuer, accountant, surveyor, banker, professionaladviser, broker, financial adviser, auctioneer or other expert whether obtained bythe Issuer, the Guarantor, the Issuing and Paying Agent, the Bond Trustee orotherwise and whether or not addressed to the Bond Trustee notwithstanding thatsuch advice, report, opinion, information, or any engagement letter or any otherdocument entered into by the Bond Trustee and the relevant person in connection
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therewith, contains any monetary or other limit on the liability of the relevantperson and the Bond Trustee shall not be responsible for any Liability occasionedby so acting or relying.
(b) Any such advice, opinion or information may be sent or obtained by, letter, telex,telegram, facsimile transmission, cable or e-mail and the Bond Trustee shall notbe liable for acting on any advice, opinion or information purporting to beconveyed by any such letter, telex, telegram, facsimile transmission, cable or e-mail although the same shall contain some error or shall not be authentic.
(c) The Bond Trustee may call for and shall be at liberty to accept as sufficientevidence of any fact or matter or the expediency of any transaction or thing acertificate signed by two Authorized Signatories of the Issuer or, as the case maybe, the Guarantor or a managing general partner of the Guarantor and the BondTrustee shall not be bound in any such case to call for further evidence or beresponsible for any Liability that may be occasioned by it or any other personacting on such certificate.
(d) The Bond Trustee shall be at liberty to hold this Trust Deed and any otherdocuments relating thereto or to deposit them in any part of the world with anybanker or banking company or company whose business includes undertaking thesafe custody of documents or lawyer or firm of lawyers considered by the BondTrustee to be of good repute and the Bond Trustee shall not be responsible for orrequired to insure against any Liability incurred in connection with any suchholding or deposit and may pay all sums required to be paid on account of or inrespect of any such deposit.
(e) The Bond Trustee shall not be responsible for the receipt or application of theproceeds of the issue of any of the Covered Bonds by the Issuer, the exchange ofany Global Covered Bond for another Global Covered Bond or DefinitiveCovered Bonds or the delivery of any Global Covered Bond or DefinitiveCovered Bonds to the person(s) entitled to it or them.
(f) The Bond Trustee shall not be bound to give notice to any person of the executionof any documents comprised or referred to herein or to take any steps to ascertainwhether any Issuer Event of Default, Potential Issuer Event of Default, GuarantorEvent of Default or Potential Guarantor Event of Default has occurred and, until itshall have actual knowledge or express notice pursuant hereto to the contrary, theBond Trustee shall be entitled to assume that no Issuer Event of Default, PotentialIssuer Event of Default, Guarantor Event of Default or Potential Guarantor Eventof Default has occurred and that each of the Issuer and the Guarantor is observingand performing all its obligations hereunder.
(g) Save as expressly otherwise provided herein, the Bond Trustee shall have absoluteand uncontrolled discretion as to the exercise or non exercise of its trusts, powers,
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authorities and discretions hereunder (the exercise or non exercise of which asbetween the Bond Trustee and the Covered Bondholders, the Receiptholders andthe Couponholders shall be conclusive and binding on the Covered Bondholders,the Receiptholders and the Couponholders) and shall not be responsible for anyLiability which may result from their exercise or non exercise and in particularthe Bond Trustee shall not be bound to act at the request or direction of theHolders or otherwise under any provision hereof or to take at such request ordirection or otherwise any other action under any provision hereof, withoutprejudice to the generality of Clause 10.1, unless it shall first be indemnifiedand/or secured to its satisfaction against all Liabilities to which it may renderitself liable or which it may incur by so doing.
(h) The Bond Trustee shall not be liable to any person by reason of having acted uponany Extraordinary Resolution in writing or any Extraordinary Resolution or otherresolution purporting to have been passed at any meeting of the holders ofCovered Bonds of all or any Series in respect whereof minutes have been madeand signed or any direction or request of the holders of the Covered Bonds of allor any Series even though subsequent to its acting it may be found that there wassome defect in the constitution of the meeting or the passing of the resolution, (inthe case of an Extraordinary Resolution in writing) that not all such holders hadsigned the Extraordinary Resolution or (in the case of a direction or request) itwas not signed by the requisite number of holders or that for any reason theresolution, direction or request was not valid or binding upon such holders and therelative Receiptholders and Couponholders.
(i) The Bond Trustee shall not be liable to any person by reason of having acceptedas valid or not having rejected any Covered Bond, Receipt or Coupon purportingto be such and subsequently found to be forged or not authentic.
(j) Without prejudice to the right of indemnity by law given to trustees, each of theIssuer and, following the occurrence of a Covered Bond Guarantee ActivationEvent the Guarantor, shall jointly and severally indemnify the Bond Trustee, itsofficers, directors and employees and successors and every Appointee and keep itor him indemnified against all Liabilities to which it or he may properly be orbecome subject or which may be properly incurred by it or him in the executionor purported execution of any of its or his trusts, powers, authorities anddiscretions hereunder or any other Transaction Document to which the BondTrustee is a party or its or his functions under any such appointment (including allLiabilities incurred in disputing or defending any of the foregoing). Thisindemnification shall survive the termination or discharge of this Trust Deed andthe retirement or replacement of the Bond Trustee.
(k) Any consent or approval given by the Bond Trustee for the purposes hereof maybe given on such terms and subject to such conditions (if any) as the Bond Trustee
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thinks fit and notwithstanding anything to the contrary herein may be givenretrospectively.
(l) The Bond Trustee shall not (unless and to the extent ordered so to do by a court ofcompetent jurisdiction) be required to disclose to any Covered Bondholder,Receiptholder, Couponholder or any other Secured Creditor any information(including, without limitation, information of a confidential, financial or pricesensitive nature) made available to the Bond Trustee by the Issuer, the Guarantoror any other person in connection herewith or the Security Agreement and noHolder, Receiptholder, Couponholder or other Secured Creditor shall be entitledto take any action to obtain from the Bond Trustee any such information.
(m) Where it is necessary or desirable for any purpose in connection herewith toconvert any sum from one currency to another it shall (unless otherwise providedherein or required by law) be converted at such rate or rates, in accordance withsuch method and as at such date for the determination of such rate of exchange, asmay be agreed by the Bond Trustee in consultation with the Issuer and any rate,method and date so agreed shall be binding on the Issuer, the Guarantor, theCovered Bondholders, the Receiptholders, the Couponholders and the otherSecured Creditors.
(n) The Bond Trustee may certify whether or not any of the conditions, events andacts set out in paragraph 21.2(a) is in its opinion materially prejudicial to theinterests of the Covered Bondholders of any Series and any such certificate shallbe conclusive and binding upon the Issuer, the Guarantor, the CoveredBondholders, the Receiptholders and the Couponholders.
(o) The Bond Trustee as between itself and the Covered Bondholders, theReceiptholders and the Couponholders may determine all questions and doubtsarising in relation to any of the provisions hereof. Every such determination,whether or not relating in whole or in part to the acts or proceedings of the BondTrustee, shall be conclusive and shall bind the Bond Trustee and the CoveredBondholders, the Receiptholders, the Couponholders and the other SecuredCreditors.
(p) In connection with the exercise by it of any of its trusts, powers, authorities ordiscretions hereunder (including any modification, waiver, authorization,determination or substitution), the Bond Trustee shall have regard to the generalinterests of the Covered Bondholders of each Series as a class (but shall not haveregard to any interests arising from circumstances particular to individual CoveredBondholders, Receiptholders or Couponholders whatever their number) and, inparticular but without limitation, shall not have regard to the consequences ofsuch exercise for individual Covered Bondholders, Receiptholders andCouponholders (whatever their number) resulting from their being for anypurpose domiciled or resident in, or otherwise connected with, or subject to the
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jurisdiction of, any particular territory or any political sub division thereof and theBond Trustee shall not be entitled to require, nor shall any Covered Bondholder,Receiptholder or Couponholder be entitled to claim, from the Issuer, theGuarantor, the Bond Trustee or any other person any indemnification or paymentin respect of any tax consequences of any such exercise upon individual CoveredBondholders, Receiptholders and/or Couponholders, except to the extent alreadyprovided for in Condition 8 (Taxation) and/or in any undertaking or covenantgiven in addition thereto or in substitution therefor hereunder.
(q) Any trustee hereof being a lawyer, accountant, broker or other person engaged inany profession or business shall be entitled to charge and be paid all usual andproper professional and other charges for business transacted and acts done byhim or his firm in connection with the trusts hereof or any other of theTransaction Documents to which the Bond Trustee is a party and also hisreasonable charges in addition to disbursements for all other work and businessdone and all time spent by him or his firm in connection with matters arising inconnection herewith including matters which might or should have been attendedto in person by a trustee not being a lawyer, accountant, broker or otherprofessional person.
(r) The Bond Trustee may whenever it thinks fit delegate by power of attorney orotherwise to any person or persons or fluctuating body of persons (whether beinga joint trustee of the trust presents or not) all or any of its trusts, powers,authorities and discretions hereunder. Such delegation may be made upon suchterms (including power to sub delegate) and subject to such conditions andregulations as the Bond Trustee may in the interests of the Covered Bondholdersthink fit. Provided the Bond Trustee has exercised reasonable care in the selectionof any such delegate, the Bond Trustee shall not be under any obligation tosupervise the proceedings or acts of any such delegate or sub delegate or be in anyway responsible for any Liability incurred by reason of any misconduct or defaulton the part of any such delegate or sub delegate. The Bond Trustee shall within areasonable time after any such delegation or any renewal, extension ortermination thereof give notice thereof to the Issuer.
(s) The Bond Trustee may in the conduct of the trusts hereof instead of actingpersonally employ and pay an agent (whether being a lawyer or other professionalperson) to transact or conduct, or concur in transacting or conducting, anybusiness and to do, or concur in doing, all acts required to be done in connectionherewith (including the receipt and payment of money). Provided the BondTrustee has exercised reasonable care in the selection of any such agent, the BondTrustee shall not be in any way responsible for any Liability incurred by reason ofany misconduct or default on the part of any such agent or be bound to supervisethe proceedings or acts of any such agent.
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(t) The Bond Trustee shall not be responsible for the execution, delivery, legality,effectiveness, adequacy, genuineness, validity, enforceability or admissibility inevidence of this Trust Deed and the Transaction Documents or any otherdocument relating or expressed to be supplemental thereto and shall not be liablefor any failure to obtain any licence, consent or other authority for the execution,delivery, legality, effectiveness, adequacy, genuineness, validity, performance,enforceability or admissibility in evidence of this Trust Deed and the TransactionDocuments or any other document relating or expressed to be supplementalthereto.
(u) The Bond Trustee may appoint and pay any person to act as a custodian ornominee on any terms in relation to such assets of the trusts constituted hereby asthe Bond Trustee may determine, including for the purpose of depositing with acustodian this Trust Deed or any document relating to the trusts constitutedhereby and the Bond Trustee shall not be responsible for any Liability incurred byreason of the misconduct, omission or default on the part of any person appointedby it hereunder or be bound to supervise the proceedings or acts of such person;the Bond Trustee is not obliged to appoint a custodian if the Bond Trustee investsin securities payable to bearer.
(v) Subject to the requirements, if any, of the Stock Exchange, any corporation intowhich the Bond Trustee shall be merged or with which it shall be consolidated orany company resulting from any such merger or consolidation shall be a partyhereto and shall be the Bond Trustee under the trust presents without executing orfiling any paper or document or any further act on the part of the parties thereto.
(w) Unless notified to the contrary, the Bond Trustee shall be entitled to assumewithout enquiry (other than requesting a certificate pursuant to Clause 15(o)) thatno Covered Bonds are held by, for the benefit of, or on behalf of, the Issuer or theGuarantor.
(x) The Bond Trustee shall have no responsibility whatsoever to the Issuer, theGuarantor, any Covered Bondholder, Receiptholder or Couponholder or any otherperson for the maintenance of or failure to maintain any rating of any of theCovered Bonds by any Rating Agency.
(y) The Bond Trustee shall not be liable or responsible for any Liabilities orinconvenience which may result from anything done or omitted to be done by it inaccordance with the provisions hereof.
(z) If, in connection with the exercise of its powers, trusts, authorities or discretions,the Bond Trustee is of the opinion that the interest of the holders of the CoveredBonds of any one or more Series would be materially prejudiced thereby, theBond Trustee shall not exercise such power, trust, authority or discretion withoutthe approval of such Covered Bondholders by Extraordinary Resolution or by a
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written resolution of such Covered Bondholders of not less than fifty per cent. ofthe Principal Amount Outstanding of the Covered Bonds of the relevant Seriesthen outstanding.
(aa) The Bond Trustee will not be responsible for any loss, expense or liability, whichmay be suffered as a result of any Loans or Related Security, or any deeds ordocuments of title thereto, being uninsured or inadequately insured or being heldby clearing organisations or their operators or by intermediaries such as banks,brokers or other similar persons on behalf of the Bond Trustee. The Bond Trusteewill not be responsible for (i) supervising the performance by the Issuer or anyother party to the Transaction Documents of their respective obligations under theTransaction Documents and the Bond Trustee will be entitled to assume, until ithas written notice to the contrary, that all such persons are properly performingtheir duties; (ii) considering the basis on which approvals or consents are grantedby the Issuer or any other party to the Transaction Documents under theTransaction Documents; (iii) monitoring the Portfolio, including, withoutlimitation, whether the Portfolio is in compliance with the Asset Coverage Testand/or the Amortization Test; or (iv) monitoring whether Loans and RelatedSecurity satisfy the Eligibility Criteria. The Bond Trustee will not be liable to anyCovered Bondholder or other Secured Creditor for any failure to make or to causeto be made on their behalf the searches, investigations and enquiries which wouldnormally be made by a prudent chargee in relation to the Security and have noresponsibility in relation to the legality, validity, sufficiency and enforceability ofthe Security and the Transaction Documents.
(bb) Where hereunder, the Bond Trustee is required to consider whether any event orthe exercise by it of any of its powers, authorities or discretions is or will bematerially prejudicial to the interests of the Covered Bondholders of one or moreSeries, the Bond Trustee shall be entitled to call for and rely and act upon theadvice or opinion of any reputable financial or other adviser (whether or not suchfinancial adviser shall be a Secured Creditor or otherwise party to any TransactionDocument) and if relied upon by the Bond Trustee shall be binding on theCovered Bondholders of all Series and the Bond Trustee shall not incur anyLiability by reason of so acting or relying.
None of the provisions contained in this Trust Deed shall require the Bond Trustee toexpend or risk its own funds or otherwise incur financial liability on the performance ofany of its duties or in the exercise of any of its rights or powers if there are anyreasonable grounds for believing that the reimbursement of such expenditure orindemnity satisfactory to the Bond Trustee against such risk or liability is not assured toit, provided that the Bond Trustee, shall forthwith upon making such a determination,deliver notice of the same to the Issuer and the Guarantor, which notice shall include thegrounds for such belief.
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19. Bond Trustee’s Liability
19.1 Nothing herein shall in any case in which the Bond Trustee has failed to show the degreeof care and diligence required of it as trustee having regard to the provisions hereofconferring on it any trusts, powers, authorities or discretions exempt the Bond Trusteefrom or indemnify it against any liability for breach of trust.
19.2 Without detracting from the obligations of Computershare Trust Company of Canada asthe Custodian under the Custodial Agreement or as the Corporate Services Providerunder the Corporate Services Agreement, Computershare Trust Company of Canada, inits capacity as Bond Trustee, has entered into this Trust Deed and the other TransactionDocuments to which the Bond Trustee is a party in its capacity as Bond Trustee.Whenever any reference is made in this Trust Deed, any other Transaction Document towhich the Bond Trustee is a party or in any document delivered in connection herewith ortherewith, to an act to be performed by the Bond Trustee, such reference shall beconstrued and applied for all purposes as if it referred to an act to be performed by theBond Trustee for and on behalf of the Covered Bondholders and the other SecuredCreditors.
19.3 Except for the payment obligations of the Issuer and the Guarantor under the CoveredBonds and the Covered Bond Guarantee, no party to this Trust Deed shall be liable to anyother party, or held in breach of this Trust Deed, if prevented, hindered, or delayed in theperformance or observance of any provision contained herein by reason of act of God,riots, terrorism, acts of war, epidemics, governmental action or judicial order,earthquakes, or any other similar causes (including, but not limited to, mechanical,electronic or communication interruptions, disruptions or failures). Performance timesunder this Trust Deed shall be extended for a period of time equivalent to the time lostbecause of any delay that is excusable under this Section 19.3.
19.4 Notwithstanding any other provision of this Agreement, and whether such losses ordamages are foreseeable or unforeseeable, Computershare Trust Company of Canadashall not be liable under any circumstances whatsoever for any special, indirect,incidental, consequential, exemplary, aggravated or punitive losses or damages.
19.5 The Bond Trustee shall retain the right not to act and shall not be liable for refusing to actif, due to a lack of information or for any other reason whatsoever, the Bond Trustee, inits sole judgment, determines that such act might cause it to be in non-compliance withany applicable anti-money laundering or anti-terrorist legislation, regulation or guideline.Further, should the Bond Trustee, in its sole judgment, determine at any time that itsacting under this Agreement has resulted in its being in non-compliance with anyapplicable anti-money laundering or anti-terrorist legislation, regulation or guideline,then it shall have the right to resign on 10 days’ written notice to the Issuer and theGuarantor, provided that (a) the Bond Trustee’s written notice shall describe thecircumstances of such non-compliance; and (b) if such circumstances are rectified to the
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Bond Trustee’s satisfaction within such 10 day period, then such resignation shall not beeffective.
20. Bond Trustee Contracting with the Issuer and the Guarantor
Neither the Bond Trustee nor any director or officer or holding company, Subsidiary orassociated company of a corporation acting as a trustee hereunder shall by reason of its orhis fiduciary position be in any way precluded from:
(a) entering into or being interested in any contract or financial or other transaction orarrangement with the Issuer or the Guarantor or any of their respectiveSubsidiaries and affiliates (including without limitation any contract, transactionor arrangement of a banking or insurance nature or any contract, transaction orarrangement in relation to the making of loans or the provision of financialfacilities or financial advice to, or the purchase, placing or underwriting of or thesubscribing or procuring subscriptions for or otherwise acquiring, holding ordealing with, or acting as paying agent in respect of, the Covered Bonds or anyother covered bonds, bonds, stocks, shares, debenture stock, debentures or othersecurities of, the Issuer, the Guarantor or any of their respective Subsidiaries oraffiliates); or
(b) accepting or holding the trusteeship of any other trust deed constituting orsecuring any other securities issued by or guaranteed by, or relating to the Issueror the Guarantor or any of their respective Subsidiaries or affiliates, or any otheroffice of profit under the Issuer or the Guarantor or any of their respectiveSubsidiaries or affiliates,
and shall be entitled to exercise and enforce its rights, comply with its obligations andperform its duties under or in relation to any such contract, transaction or arrangement asis referred to in (a) above or, as the case may be, any such trusteeship or office of profitas is referred to in (b) above without regard to the interests of, or consequences for theCovered Bondholders, Receiptholders or Couponholders and notwithstanding that thesame may be contrary or prejudicial to the interests of the Covered Bondholders and shallnot be responsible for any Liability occasioned to the Covered Bondholders,Receiptholders or Couponholders thereby and shall be entitled to retain and shall not bein any way liable to account for any profit made or share of brokerage or commission orremuneration or other amount or benefit received thereby or in connection therewith.
Where any holding company, Subsidiary or associated company of the Bond Trustee orany director or officer of the Bond Trustee acting other than in his capacity as such adirector or officer has any information, the Bond Trustee shall not thereby be deemedalso to have knowledge of such information and, unless it shall have actual knowledge ofsuch information, shall not be responsible for any loss suffered by Covered Bondholdersresulting from the Bond Trustee’s failing to take such information into account in actingor refraining from acting hereunder or in relation hereto.
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21. Waiver, Authorization and Determination and Substitution
21.1 The Bond Trustee may without the consent of any of the Covered Bondholders of anySeries, the related Receiptholders and/or Couponholders or any of the other SecuredCreditors and without prejudice to its rights in respect of any subsequent breach, IssuerEvent of Default, Potential Issuer Event of Default, Guarantor Event of Default orPotential Guarantor Event of Default from time to time and at any time but only if (i) inso far as in its opinion the interests of the Covered Bondholders of any Series shall not bematerially prejudiced thereby and (ii) it has not been informed by any CoveredBondholders of any Series that such Covered Bondholder(s) will be materially prejudicedthereby, waive or authorise any breach or proposed breach by the Issuer or the Guarantorof any of the covenants or provisions contained herein or the other TransactionDocuments or determine that any Issuer Event of Default, Potential Issuer Event ofDefault, Guarantor Event of Default or Potential Guarantor Event of Default shall not betreated as such for the purposes hereof PROVIDED ALWAYS THAT the Bond Trusteeshall not exercise any powers conferred on it by this Clause in contravention of anyexpress direction given by Extraordinary Resolution or by a request under Condition 7(Events of Default) but so that no such direction or request shall affect any waiver,authorization or determination previously given or made. Any such waiver, authorizationor determination may be made on such terms and subject to such conditions (if any) asthe Bond Trustee may determine, shall be binding upon the Secured Creditors and, if, butonly if, the Bond Trustee shall so require, shall be notified by the Issuer to the CoveredBondholders in accordance with Condition 14 (Notices) as soon as practicable thereafter.
MODIFICATION
21.2 (a) Subject to Clause 21.2(b), the Bond Trustee may without the consent or sanctionof any of the Secured Creditors at any time and from time to time concur with theIssuer and the Guarantor and any other party in making any modification (and forthis purpose the Bond Trustee may disregard whether any such modificationrelates to a Series Reserved Matter) (i) to this Trust Deed and/or the otherTransaction Documents which in the opinion of the Bond Trustee may beexpedient to make PROVIDED THAT (a) the Bond Trustee is of the opinion thatsuch modification will not be materially prejudicial to the interests of any of theCovered Bondholders of any Series and (b) the Bond Trustee has not beeninformed by any Covered Bondholders of any Series that such CoveredBondholder(s) will be materially prejudiced thereby or (ii) to this Trust Deed orthe other Transaction Documents which is of a formal, minor or technical natureor to correct a manifest error or an error established as such to the satisfaction ofthe Bond Trustee or to comply with mandatory provisions of law. Any suchmodification may be given or made on such terms and subject to such conditions(if any) as the Bond Trustee may determine, shall be binding on the SecuredCreditors and, if, but only if, the Bond Trustee shall so require, shall be notifiedby the Issuer to the Covered Bondholders in accordance with Condition 14(Notices) as soon as practicable thereafter.
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(b) The prior consent of the Bond Trustee and the Secured Creditors will not berequired and will not be obtained in relation to the accession of any New Seller tothe Programme PROVIDED THAT the relevant conditions precedent in theTransaction Documents are satisfied at the time of the intended accession.
SUBSTITUTION
21.3 (a) If so requested by the Issuer, the Bond Trustee shall, if it is satisfied based onadvice from its legal advisors that to do so would not be materially prejudicial tothe Covered Bondholders and the Rating Agency Condition has been satisfied,without the consent of the Covered Bondholders, Receiptholders orCouponholders, agree with the Issuer and the Guarantor to the substitution inplace of the Issuer (or of the previous substitute under this Clause) as the principaldebtor hereunder and all other Transaction Documents of any Subsidiary of theIssuer (such substituted issuer being hereinafter called the “New Company”)PROVIDED THAT in each case a trust deed is executed and other forms ofundertaking are given by the New Company in the form and manner satisfactoryto the Bond Trustee, agreeing to be bound by the provisions hereof and the otherTransaction Documents and with any consequential amendments which the BondTrustee may deem appropriate as fully as if the New Company had been namedherein and the other Transaction Documents as the principal debtor in place of theIssuer (or of the previous substitute under this Clause).
(b) The following further conditions shall apply to (a) above:
(i) the Issuer and the Guarantor shall deliver to the Bond Trustee a certificateof two directors of the Issuer and a certificate of the Managing GP of theGuarantor stating that immediately after giving effect to such transactionno Issuer Event of Default (in respect of the Issuer) or Guarantor Event ofDefault, respectively and no Potential Issuer Event of Default (in respectof the Issuer) or Potential Guarantor Event of Default, respectively, shallhave happened and be continuing;
(ii) the Issuer shall execute and deliver to the Bond Trustee (in such formreasonably acceptable to the Bond Trustee) an undertaking to guaranteethe obligations of the New Company in respect of the Covered Bonds andthis Trust Deed;
(iii) where the New Company is incorporated, domiciled or resident in, orsubject generally to the taxing jurisdiction of, a territory other than or inaddition to the Tax Jurisdiction, undertakings or covenants shall be givenby the New Company in terms corresponding to the provisions ofCondition 8 (Taxation) with the substitution for (or, as the case may be,the addition to) the references to the Tax Jurisdiction of references to thatother or additional territory in which the New Company is incorporated,
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domiciled or resident or to whose taxing jurisdiction it is subject and,where such undertaking or covenant is provided, references in Condition6.02 (Early Redemption for Taxation Reasons) to the Tax Jurisdictionshall be deemed to be amended accordingly;
(iv) the Covered Bond Guarantee remaining in place mutatis mutandis inrelation to the obligations of the New Company; and
(v) the New Company shall deliver to the Bond Trustee such legal opinions ofinternationally recognised counsel as may be reasonably requested by theBond Trustee.
BREACH
21.4 Any breach of or failure to comply by the Issuer or the Guarantor with any such termsand conditions as are referred to in this Clause 21 shall constitute a default by the Issueror the Guarantor in the performance or observance of a covenant or provision binding onit under or pursuant hereto.
22. Holder of Definitive Covered Bond Assumed to be Receiptholder and Couponholder
22.1 Wherever herein the Bond Trustee is required or entitled to exercise a power, trust,authority or discretion hereunder, except as ordered by a court of competent jurisdictionor as required by applicable law, the Bond Trustee shall, notwithstanding that it may haveexpress notice to the contrary, assume that each Covered Bondholder is the holder of allReceipts and Coupons appertaining to each Definitive Covered Bond of which he is theholder.
NO NOTICE TO RECEIPTHOLDERS OR COUPONHOLDERS
22.2 Neither the Bond Trustee nor the Issuer shall be required to give any notice to theReceiptholders or Couponholders for any purpose hereunder and the Receiptholders orCouponholders shall be deemed for all purposes to have notice of the contents of anynotice given to the holders of Covered Bonds in accordance with Condition 14 (Notices).
23. Currency Indemnity
Each of the Issuer and, following the occurrence of a Covered Bond GuaranteeActivation Event, the Guarantor shall, jointly and severally indemnify the Bond Trustee,every Appointee, the Covered Bondholders, the Receiptholders and the Couponholdersand keep them indemnified against:
(a) any Liability incurred by any of them arising from the non-payment by the Issueror the Guarantor of any amount due to the Bond Trustee or the holders of theCovered Bonds and the relative Receiptholders or Couponholders hereunder byreason of any variation in the rates of exchange between those used for the
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purposes of calculating the amount due under a judgment or order in respectthereof and those prevailing at the date of actual payment by the Issuer or theGuarantor; and
(b) any deficiency arising or resulting from any variation in rates of exchangebetween (i) the date as of which the local currency equivalent of the amounts dueor contingently due hereunder (other than this Clause) is calculated for thepurposes of any bankruptcy, insolvency, winding up or liquidation of the Issueror, as the case may be, the Guarantor and (ii) the final date for ascertaining theamount of claims in such bankruptcy, insolvency, winding up or liquidation. Theamount of such deficiency shall be deemed not to be reduced by any variation inrates of exchange occurring between the said final date and the date of anydistribution of assets in connection with any such bankruptcy, insolvency orliquidation.
The above indemnities shall constitute obligations of the Issuer and the Guarantorseparate and independent from their other obligations under the other provisions hereofand shall apply irrespective of any indulgence granted by the Bond Trustee or theCovered Bondholders, the Receiptholders or the Couponholders from time to time andshall continue in full force and effect notwithstanding the judgment or filing of any proofor proofs in any bankruptcy, insolvency or liquidation of the Issuer or, as the case maybe, the Guarantor for a liquidated sum or sums in respect of amounts due hereunder(other than this Clause). Any such deficiency as aforesaid shall be deemed to constitute aloss suffered by the Covered Bondholders, the Receiptholders and the Couponholders andno proof or evidence of any actual loss shall be required by the Issuer or the Guarantor orits or their liquidator or liquidators.
24. New Bond Trustee
The power to appoint a new bond trustee hereof shall be vested solely in the Issuer andthe Guarantor jointly but no person shall be appointed who shall not previously have beenapproved by an Extraordinary Resolution of all the Covered Bondholders. One or morepersons may hold office as bond trustee or bond trustees hereof but such bond trustee orbond trustees shall (a) meet the requirements for a bond trustee in the CMHC Guide, and(b) be or include a Trust Corporation. Whenever there shall be more than two bondtrustees the majority of such bond trustees shall be competent to execute and exercise allthe duties, powers, trusts, authorities and discretions vested in the Bond Trustee herebyPROVIDED THAT a Trust Corporation shall be included in such majority. Anyappointment of a new bond trustee hereof shall as soon as practicable thereafter benotified by the Issuer to the Issuing and Paying Agent, the Covered Bondholders and theRating Agencies.
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25. Separate and Co-Trustees
Notwithstanding the provisions of Clause 24 above, the Bond Trustee may, upon givingprior notice to the Issuer, the Guarantor and the Rating Agencies (but without the consentof the Issuer, the Guarantor, the Rating Agencies, the Covered Bondholders,Receiptholders or Couponholders), appoint any person established or resident in anyjurisdiction (whether a Trust Corporation or not) that meets the requirements for a bondtrustee in the CMHC Guide to act either as a separate bond trustee or as a co bond trusteejointly with the Bond Trustee:
(a) if the Bond Trustee considers such appointment to be in the interests of theCovered Bondholders;
(b) for the purposes of conforming to any legal requirements, restrictions orconditions in any jurisdiction in which any particular act or acts is or are to beperformed; or
(c) for the purposes of obtaining a judgment in any jurisdiction or the enforcement inany jurisdiction of either a judgment already obtained or any of the provisionshereof against the Issuer or the Guarantor.
Each of the Issuer and the Guarantor irrevocably appoints the Bond Trustee to be itsattorney coupled with an interest in its name and on its behalf to execute any suchinstrument of appointment. Such a person shall (subject always to the provisions hereof)have such trusts, powers, authorities and discretions (not exceeding those conferred onthe Bond Trustee hereby) and such duties and obligations as shall be conferred orimposed by the instrument of appointment. The Bond Trustee shall have power in likemanner to remove any such person. Such reasonable remuneration as the Bond Trusteemay pay to any such person, together with any attributable Liabilities incurred by it inperforming its function as such separate bond trustee or co bond trustee, shall for thepurposes hereof be treated as Liabilities incurred by the Bond Trustee.
26. Bond Trustee’s Retirement and Removal
(a) A bond trustee hereof may retire at any time on giving not less than three months’prior written notice to the Issuer, the Guarantor and the Rating Agencies withoutgiving any reason and without being responsible for any Liabilities incurred byreason of such retirement. The Covered Bondholders may by ExtraordinaryResolution of all the Covered Bondholders remove any bond trustee or bondtrustees for the time being hereof. Each of the Issuer and the Guarantor undertakesthat in the event of the only bond trustee hereof which is a Trust Corporationgiving notice under this Clause or being removed by Extraordinary Resolution itwill use all reasonable endeavours to procure that a new bond trustee hereof beinga Trust Corporation that meets the requirements for a bond trustee in the CMHCGuide is appointed as soon as reasonably practicable thereafter. The retirement or
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removal of any such bond trustee shall not become effective until a successorbond trustee being a Trust Corporation that meets the requirements for a bondtrustee in the CMHC Guide is appointed and notice thereof has been provided tothe Rating Agencies and CMHC prior to such effective date. If, in suchcircumstances, no appointment of such new bond trustee has become effectivewithin 60 days of the date of such notice or Extraordinary Resolution, the BondTrustee shall be entitled to appoint a Trust Corporation that meets therequirements for a bond trustee in the CMHC Guide as bond trustee hereof, but nosuch appointment shall take effect unless previously approved by anExtraordinary Resolution.
(b) Notwithstanding the provisions of Clause 26(a) and without any requirement ofapproval by Covered Bondholders, should the Bond Trustee be in breach of anyof the representations, warranties or covenants provided in Clause 16, theGuarantor may terminate the Bond Trustee. The Guarantor will use all reasonableendeavours to procure that a new bond trustee hereof being a Trust Corporationthat meets the requirements for a bond trustee in the CMHC Guide is appointed assoon as reasonably practicable thereafter. The removal of any such bond trusteeshall not become effective until a successor bond trustee being a TrustCorporation that meets the requirements for a bond trustee in the CMHC Guide isappointed and notice thereof has been provided to the Rating Agencies andCMHC prior to such effective date.
(c) The Guarantor or the Issuer shall provide notice to CMHC of the retirement orremoval of the Bond Trustee and of the Bond Trustee’s replacementcontemporaneously with the earlier of (i) notice of such retirement or removal andreplacement to a Rating Agency, (ii) notice of such retirement or removal andreplacement being provided to or otherwise made available to CoveredBondholders and (iii) five Business Days following such retirement or removaland replacement (unless the replacement has yet to be identified at that time, inwhich case notice of the replacement may be provided no later than 10 BusinessDays thereafter). Any such notice shall include (if known) the reasons for theretirement or removal of the Bond Trustee, all information relating to thereplacement required by the CMHC Guide and a revised and amended copy ofthis Trust Deed with such replacement.
27. Bond Trustee’s Powers to be Additional
The powers conferred upon the Bond Trustee hereby shall be in addition to any powerswhich may from time to time be vested in the Bond Trustee by the general law or as aholder of any of the Covered Bonds, Receipts or Coupons.
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28. Notices
Any notice or demand to the Issuer, the Guarantor or the Bond Trustee to be given, madeor served for any purposes hereunder or the Security Agreement shall be given, made orserved by sending the same by pre paid post (first class if inland, first class airmail ifoverseas) or facsimile transmission or email or by delivering it by hand as follows:
to the Issuer: National Bank of Canada
(Attention: Corporate Treasuryc/o Éric Girard, Senior Vice-President)Facsimile No.: (514) 394-6268(with a copy to the Guarantor)
to the Guarantor: NBC Covered Bond (Legislative) GuarantorLimited Partnership
(Attention: Corporate Treasuryc/o Éric Girard, Senior Vice-President)Facsimile No.: (514) 394-6268
to the Bond Trustee: Computershare Trust Company of Canada
(Attention: General Manager, Corporate TrustServices)Facsimile No.: (514) 982-7677
or to such other address, facsimile number or email address as shall have been notified (inaccordance with this Clause) to the other parties hereto and any notice or demand sent bypost as aforesaid shall be deemed to have been given, made or served three days in thecase of inland post or seven days in the case of overseas post after dispatch and anynotice or demand sent by facsimile transmission or email as aforesaid shall be deemed tohave been given, made or served 24 hours after the time of dispatch PROVIDED THATin the case of a notice or demand given by facsimile transmission or email such notice ordemand shall forthwith be confirmed by post. The failure of the addressee to receive suchconfirmation shall not invalidate the relevant notice or demand given by facsimiletransmission.
29. Amendments
Subject to the terms of Clause 21, and except as otherwise expressly provided in thisTrust Deed, the provisions in this Trust Deed may be amended only by written agreementof all of the parties hereto, and if any such amendment (or any waiver given inaccordance with Clause 21) is determined to be material in the opinion of the Guarantor,the Rating Agency Condition shall be required to be satisfied in respect thereof. For
MT DOCS 12391588v6
48 Trust Deed
certainty, any increase in the maximum Asset Percentage set forth in Clause 14 shall bedeemed to be a material amendment to this Trust Deed. The Guarantor (or the CashManager on its behalf) shall deliver notice to the Rating Agencies of any amendment orwaiver which does not require satisfaction of the Rating Agency Condition provided thatfailure to deliver such notice shall not constitute a breach of the obligations of theGuarantor under this Trust Deed. This Trust Deed (and the benefits and obligationscontained in it) may not be assigned by any party without the prior written consent ofeach of the other parties hereto and the Rating Agency Condition having been satisfied inrespect of such assignment.
30. Non-Petition
The Issuer and the Bond Trustee agree that they shall not institute or join any otherPerson or entity in instituting against, or with respect to, the Guarantor, or any of thegeneral partners of the Guarantor, any bankruptcy or insolvency proceeding or event solong as any Covered Bonds issued by the Issuer under the Programme shall beoutstanding or there shall not have elapsed one year plus one day since the last day onwhich any such Covered Bonds shall have been outstanding. The foregoing provisionshall survive the termination of this Trust Deed by either party hereto.
31. Governing Law
This Trust Deed shall be governed by, and construed in accordance with, the laws of theProvince of Ontario and the federal laws of Canada applicable therein, without regard toconflict of law principles.
32. Submission to Jurisdiction
Each of the parties hereto irrevocably attorns and submits to the non-exclusivejurisdiction of the courts of the Province of Ontario in any action or proceeding arisingout of or relating to this Agreement, and hereby irrevocably agrees that all claims inrespect of such action or proceeding may be heard and determined by such courts. Eachparty to this Agreement hereby irrevocably waives, to the fullest extent it may possiblydo so, any defence or claim that the courts of the Province of Ontario are an inconvenientforum for the maintenance or hearing of such action or proceeding.
33. Counterparts
This Trust Deed and any trust deed supplemental hereto may be executed and deliveredin any number of counterparts, all of which, taken together, shall constitute one and thesame deed and any party to this Trust Deed or any trust deed supplemental hereto mayenter into the same by executing and delivering a counterpart.
MT DOCS 12391588v6
49 Trust Deed
34. Liability of Limited Partners
NBC Covered Bond (Legislative) Guarantor Limited Partnership is a limited partnershipformed under the Limited Partnerships Act (Ontario), a limited partner of which is,except as expressly required by law, only liable for any of its liabilities or any of itslosses to the extent of the amount that the limited partner has contributed or agreed tocontribute to its capital.
[The Remainder of this page is intentionally left blank]
Trust DeedMT DOCS 12391588
IN WITNESS whereof this Trust Deed has been executed as a deed by the Issuer, the Guarantorand the Bond Trustee and delivered on the date first stated on page 1.
NATIONAL BANK OF CANADA
Per: “Eric Girard”Name: Eric GirardTitle: Authorized Signatory
NBC COVERED BOND (LEGISLATIVE)GUARANTOR LIMITED PARTNERSHIP,by its managing general partner, NBCCOVERED BOND (LEGISLATIVE) GPINC.
Per: “Eric Girard”Name: Eric GirardTitle: Authorized Signatory
COMPUTERSHARE TRUST COMPANYOF CANADA
Per: “Carole Bedard”Name: Carole BedardTitle: Authorized Signatory
Per: “Nathalie Gagnon”Name: Nathalie GagnonTitle: Authorized Signatory
MT DOCS 12391588v6
SCHEDULE 1TERMS AND CONDITIONS OF THE COVERED BONDS
See attached.
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TERMS AND CONDITIONS OF THE COVERED BONDS
The following are the terms and conditions of the Covered Bonds (the “Terms and Conditions”) which will, ascompleted by the applicable Final Terms in relation to a Tranche of Covered Bonds, apply to each Global Covered Bondand each Definitive Covered Bond, in the latter case only if permitted by the relevant stock exchange or other relevantauthority (if any) and agreed by the Issuer and the relevant Dealer(s) at the time of issue but, if not so permitted andagreed, such Definitive Covered Bond will have endorsed thereon or attached thereto such Terms and Conditions. Theapplicable Final Terms (or the relevant provisions thereof) will be endorsed upon, or attached to, each Global CoveredBond and Definitive Covered Bond
This Covered Bond is one of a Series (as defined below) of Covered Bonds issued by National Bank of Canada (the“Issuer” or the “Bank”) as part of the Issuer’s U.S.$7 billion legislative global Covered Bond programme (the“Programme”) and constituted by a Trust Deed dated the Programme Date (such trust deed as amended, supplementedor replaced, the “Trust Deed”) made between the Issuer, NBC Covered Bond (Legislative) Guarantor LimitedPartnership, as guarantor (the “Guarantor”) and Computershare Trust Company of Canada, as bond trustee (in suchcapacity, the “Bond Trustee” which expression shall include any successor as bond trustee)
The Covered Bonds have the benefit of an agency agreement dated the Programme Date (as amended, supplemented orreplaced, the “Agency Agreement”) and made between the Issuer, the Guarantor, the Bond Trustee, The Bank of NewYork Mellon, in its capacities as U.S. registrar (the “U.S. Registrar”, which expression shall include any successor inthis capacity), transfer agent and exchange agent (the “U.S. Exchange Agent”, which expression shall include anysuccessor in this capacity), The Bank of New York Mellon (Luxembourg) S.A., in its capacities as European registrar(the “European Registrar”, which expression shall include any successor in such capacity, and the “Registrar” or“Registrars” for a Tranche (as defined below)) shall be as specified in the applicable Final Terms (as defined below) andtransfer agent, and The Bank of New York Mellon, London Branch, in its capacities as issuing and principal payingagent (the “Issuing and Paying Agent”, and which expression shall include any successor in such capacity), asexchange agent (the “European Exchange Agent”, and collectively with the U.S. Exchange Agent, the “ExchangeAgent”, which expression shall include any successor in such capacity), as calculation agent (the “Calculation Agent”,which expression shall include any successor in such capacity and any substitute calculation agent appointed inaccordance with the Agency Agreement either with respect to the Programme or with respect to a particular Series) andas transfer agent and the other transfer agents named therein (collectively, the “Transfer Agent” which expression shallinclude any Registrar and any additional or successor transfer agents), and the paying agents named therein (the “PayingAgents”, which expression shall include the Issuing and Paying Agent and any substitute or additional paying agentsappointed in accordance with the Agency Agreement either with respect to the Programme or with respect to a particularSeries). As used herein, “Agents” shall mean the Paying Agents, the Registrar or Registrars, the Exchange Agent and theTransfer Agents.
Save as provided in Conditions 7 and 13, references in these Terms and Conditions to “Covered Bonds” are to CoveredBonds of this Series and shall mean:
(a) in relation to any Covered Bonds represented by a global covered bond (a “Global Covered Bond”),units of the lowest Specified Denomination in the Specified Currency;
(b) any Global Covered Bond;
(c) any definitive Covered Bonds in bearer form (“Bearer Definitive Covered Bonds”) issued inexchange for a Global Covered Bond in bearer form; and
(d) any definitive Covered Bonds in registered form (“Registered Definitive Covered Bonds”) (whetheror not issued in exchange for a Global Covered Bond in registered form).
Save as provided in Conditions 7 and 13, any references to “Coupons” (as defined in Condition 1.06), “Receipts” (asdefined in Condition 1.07) or “Talons” (as defined in Condition 1.06) are to Coupons, Receipts and Talons relating toCovered Bonds of this Series.
A9, 12A11, 12A13, 4.7
A13, 4.11
A13, 4.11
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References in these Terms and Conditions to the Final Terms are to Part A of the Final Terms(s) prepared in relation tothe Covered Bonds of the relevant Tranche or Series.
In respect of any Covered Bonds, references herein to these “Terms and Conditions” are to these terms and conditionsand any reference herein to a “Condition” is a reference to the relevant Condition of the Terms and Conditions of therelevant Covered Bonds.
The Covered Bonds are issued in series (each, a “Series”), and each Series may comprise one or more tranches(“Tranches” and each, a “Tranche”) of Covered Bonds. Each Tranche will be the subject of Final Terms (each, “FinalTerms”), a copy of which will be available free of charge during normal business hours at the specified office of theIssuing and Paying Agent and/or, as the case may be, the applicable Registrar and each other Paying Agent. In the caseof a Tranche of Covered Bonds that is not admitted to trading on a regulated market in any the EEA in circumstancesrequiring publication of a prospectus in accordance with Directive 2003/71/EC and any relevant implementing measure,copies of the Final Terms will only be available for inspection by a Holder of or, as the case may be, a Relevant AccountHolder (each as defined herein) in respect of, such Covered Bonds.
The Bond Trustee acts for the benefit of the holders for the time being of the Covered Bonds (the “holders of theCovered Bonds”, which expression shall, in relation to any Covered Bonds represented by a Global Covered Bond, beconstrued as provided below), the holders of the Receipts (the “Receiptholders”) and the holders of the Coupons (the“Couponholders”, which expression shall, unless the context otherwise requires, include the holders of the Talons (asdefined in Condition 1.06 below)), and for holders of each other series of Covered Bonds in accordance with theprovisions of the Trust Deed.
The Guarantor has, in the Trust Deed, irrevocably and unconditionally guaranteed the due and punctual payment of theGuaranteed Amounts in respect of the Covered Bonds as and when the same shall become due for payment on certaindates and in accordance with the Trust Deed (“Due for Payment”), but only after the occurrence of a Covered BondGuarantee Activation Event.
The security for the obligations of the Guarantor under the Covered Bond Guarantee and the other TransactionDocuments to which it is a party has been created in and pursuant to, and on the terms set out in, a security agreement(such security agreement as amended, supplemented or replaced the “Security Agreement”) dated the Programme Dateand made between the Guarantor, the Bond Trustee and certain other Secured Creditors.
These Terms and Conditions include summaries of and are subject to, the provisions of the Trust Deed, the SecurityAgreement, the Agency Agreement and the other Transaction Documents.
Copies of the Trust Deed, the Security Agreement, the Master Definitions and Construction Agreement (as definedbelow), the Agency Agreement and each of the other Transaction Documents (other than the Dealership Agreement andany subscription agreements) are available for inspection during normal business hours at the registered office for thetime being of the Bond Trustee being at the date of this Prospectus at 1500 University Street, Suite 700, Montréal,Québec, Canada, H3A 3S8 and at the specified office of each of the Paying Agents. Copies of the applicable Final Termsof all Covered Bonds of each Series (including in relation to unlisted Covered Bonds of any Series) are obtainable duringnormal business hours of the specified office of each of the Paying Agents, and any holder of the Covered Bonds mustproduce evidence satisfactory to the Issuer and the Bond Trustee or, as the case may be, relevant Paying Agent as to itsholding of Covered Bonds and identity. The holders of the Covered Bonds, the Receiptholders and Couponholders aredeemed to have notice of, or are bound by, and are entitled to the benefit of, all the provisions of, and definitionscontained in, the Trust Deed, the Security Agreement, the Master Definitions and Construction Agreement, the AgencyAgreement, each of the other Transaction Documents (other than the Dealership Agreement and any subscriptionagreements) and the applicable Final Terms which are applicable to them and to have notice of each set of Final Termsrelating to each other Series.
Except where the context otherwise requires, capitalized terms used or otherwise defined in these Terms and Conditionsshall bear the meanings given to them in the Master Definitions and Construction Agreement made between the partiesto the Transaction Documents on or about the Programme Date (such master definitions and construction agreement asamended, supplemented or replaced, the “Master Definitions and Construction Agreement”), a copy of each of whichmay be obtained as described above.
A6, 1
A13, 4.11
A6, 4
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1. Form and Denomination
1.01 Covered Bonds are issued in bearer form (“Bearer Covered Bonds”) or in registered form (“RegisteredCovered Bonds”), as specified in the Final Terms and are serially numbered. Registered Covered Bonds will not beexchangeable for Bearer Covered Bonds and vice versa .
The Covered Bond is a Fixed Rate Covered Bond, a Floating Rate Covered Bond or a Zero Coupon Covered Bond orany appropriate combination thereof, depending on the Interest Basis specified in the applicable Final Terms. TheCovered Bond may also be an Instalment Covered Bond depending upon the Redemption/Payment Basis specified in theapplicable Final Terms.
1.02 For so long as any of the Covered Bonds is represented by a Temporary Global Covered Bond and/orPermanent Global Covered Bond held on behalf of Euroclear and/or Clearstream, Luxembourg or so long as TheDepositary Trust Company (“DTC”) or its nominee or CDS or its nominee is the registered holder of a RegisteredGlobal Covered Bond, each person (other than Euroclear or Clearstream, Luxembourg, DTC or CDS) who is for the timebeing shown in the records of Euroclear or of Clearstream, Luxembourg, DTC or CDS as the holder of a particularprincipal amount of such Covered Bonds (a “Relevant Account Holder”) (in which regard any certificate or otherdocument issued by Euroclear or Clearstream, Luxembourg, DTC or CDS as to the principal amount of such CoveredBonds standing to the account of any person shall be conclusive and binding for all purposes save in the case of manifesterror) shall be treated by the Issuer, the Guarantor, the Bond Trustee, the Issuing and Paying Agent, the Registrar andany other Agent as the holder of such principal amount of such Covered Bonds for all purposes, in accordance with andsubject to the Terms and Conditions of the relevant Global Covered Bond and the Trust Deed, other than with respect tothe payment of principal or interest on the Covered Bonds, and, in the case of DTC or its nominee or CDS or itsnominee, voting, giving consents and making requests, for which purpose the bearer of the relevant Temporary GlobalCovered Bond and/or Permanent Global Covered Bond or registered holder of a Registered Global Covered Bond (or ineither case, the Bond Trustee in accordance with the Trust Deed) shall be treated by the Issuer, the Guarantor, the BondTrustee, the Issuing and Paying Agent and any Agent and any Registrar as the holder of such principal amount of suchCovered Bonds in accordance with and subject to the terms of the relevant Global Covered Bond and the expression“Holder” and related expressions shall be construed accordingly. Covered Bonds which are represented by a GlobalCovered Bond will be transferable only in accordance with the then current rules and procedures of Euroclear or ofClearstream, Luxembourg, DTC or CDS or any other relevant clearing system, as the case may be.
References to DTC, CDS, Euroclear or Clearstream, Luxembourg shall, whenever the context so permits (but not in thecase of any NGCB), be deemed to include a reference to any additional or alternative clearing system specified in theapplicable Final Terms as may otherwise be approved by the Issuer, the Issuing and Paying Agent and the Bond Trustee.
Bearer Covered Bonds
1.03 The Final Terms shall, if applicable, specify whether U.S. Treasury Regulation § 1.163-5(c)(2)(i)(D) (or anysuccessor U.S. Treasury regulation section, including without limitation, successor regulations issued in accordance withIRS Notice 2012-20 or otherwise in connection with the United States Hiring Incentives to Restore Employment Act of2010) (the “TEFRA D Rules”) or U.S. Treasury Regulation § 1.163-5(c)(2)(i)(C) (or any successor U.S. Treasuryregulation section, including without limitation, successor regulations issued in accordance with IRS Notice 2012-20 orotherwise in connection with the United States Hiring Incentives to Restore Employment Act of 2010) (the “TEFRA CRules”) shall apply. Each Tranche of Bearer Covered Bonds with an original maturity of more than one year isrepresented upon issue by a Temporary Global Covered Bond, unless the Final Terms specify otherwise, in particular,when the TEFRA C Rules apply.
Where the Final Terms applicable to a Tranche of Bearer Covered Bonds so specify or where a Tranche of BearerCovered Bonds has an original maturity of one year or less, such Tranche is (unless otherwise specified in the FinalTerms) represented upon issue by a Permanent Global Covered Bond.
Interests in the Temporary Global Covered Bond may be exchanged for:
(a) interests in a Permanent Global Covered Bond; or
A13, 4.4(i)
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(b) if so specified in the Final Terms, Bearer Definitive Covered Bonds.
Exchanges of interests in a Temporary Global Covered Bond for Bearer Definitive Covered Bonds or, as the case maybe, a Permanent Global Covered Bond will be made only on or after the Exchange Date (as specified in the Final Terms)and (unless the Final Terms specify that the TEFRA C Rules are applicable to the Covered Bonds) provided certificationas to the beneficial ownership thereof as required by U.S. Treasury regulations has been received in accordance with theterms of the Temporary Global Covered Bond (each certification in substantially the form set out in the TemporaryGlobal Covered Bond or in such other form as is customarily issued in such circumstances by the relevant clearingsystem).
1.04 The bearer of any Temporary Global Covered Bond shall not (unless, upon due presentation of such TemporaryGlobal Covered Bond for exchange (in whole but not in part only) for a Permanent Global Covered Bond or for deliveryof Bearer Definitive Covered Bonds, such exchange or delivery is improperly withheld or refused and such withholdingor refusal is continuing at the relevant payment date) be entitled to collect any payment in respect of the Covered Bondsrepresented by such Temporary Global Covered Bond which falls due on or after the Exchange Date or be entitled toexercise any option on a date after the Exchange Date specified in the applicable Final Terms.
1.05 Unless the Final Terms specify that the TEFRA C Rules are applicable to the Covered Bonds and subject toCondition 1.04 above, if any date on which a payment of interest is due on the Covered Bonds of a Tranche occurs whileany of the Covered Bonds of that Tranche are represented by a Temporary Global Covered Bond, the related interestpayment will be made on the Temporary Global Covered Bond only to the extent that certification as to the beneficialownership thereof as required by U.S. Treasury regulations (in substantially the form set out in the Temporary GlobalCovered Bond or in such other form as is customarily issued in such circumstances by the relevant clearing system), hasbeen received by Euroclear Bank S.A./N.V. (“Euroclear”) or Clearstream Banking, société anonyme (“Clearstream,Luxembourg”) or any other relevant clearing system in accordance with the terms of the Temporary Global CoveredBond. Payments of amounts due in respect of a Permanent Global Covered Bond or (subject to Condition 1.04 above) aTemporary Global Covered Bond will be made through Euroclear or Clearstream, Luxembourg or any other relevantclearing system without any requirement for further certification. Any reference herein to Euroclear or Clearstream,Luxembourg shall be deemed to include a reference to any other relevant clearing system.
1.06 Bearer Definitive Covered Bonds that are not Zero Coupon Covered Bonds have attached thereto, at the time oftheir initial delivery, coupons (“Coupons”), the presentation of which will be a prerequisite to the payment of interestsave in certain circumstances specified herein. Definitive Covered Bonds that are not Zero Coupon Covered Bonds, if sospecified in the Final Terms, have attached thereto, at the time of their initial delivery, a talon (“Talon”) for furthercoupons and the expression “Coupons” shall, where the context so requires, include Talons.
1.07 Bearer Definitive Covered Bonds, the principal amount of which is repayable by instalments (“InstalmentCovered Bonds”) in such amounts as may be specified in, or determined in accordance with, the provisions of the FinalTerms (each an “Instalment Amount”), have endorsed thereon a grid for recording the repayment of InstalmentAmounts or, if so specified in the Final Terms, have attached thereto, at the time of their initial delivery, paymentreceipts (“Receipts”) in respect of the Instalment Amounts repaid.
Denomination
Denomination of Bearer Covered Bonds
1.08 Bearer Covered Bonds are in the Specified Denomination(s) specified in the Final Terms. Bearer CoveredBonds of one denomination may not be exchanged for Bearer Covered Bonds of any other denomination.
Denomination of Registered Covered Bonds
1.09 Registered Covered Bonds are in the Specified Denominations specified in the Final Terms.
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Currency of Covered Bonds
1.10 The Covered Bonds are denominated in such currency as may be specified in the Final Terms. Any currencymay be so specified, subject to compliance with all applicable legal and/or regulatory and/or central bank requirements.
2. Title and Transfer
2.01 Title to Bearer Covered Bonds, Receipts and Coupons passes by delivery. References herein to the “Holders”of Bearer Covered Bonds or of Receipts or Coupons are to the bearers of such Bearer Covered Bonds or such Receipts orCoupons.
2.02 Title to Registered Covered Bonds passes by due endorsement in the relevant register. The Issuer shall procurethat the Registrar keep a register or registers in which shall be entered the names and addresses of the Holders ofRegistered Covered Bonds and particulars of the Registered Covered Bonds held by them. Such registration shall benoted on the Registered Covered Bonds by the Registrar. References herein to the “Holders” of Registered CoveredBonds are to the persons in whose names such Registered Covered Bonds are so registered in the relevant register.
2.03 The Holder of any Bearer Covered Bond, Coupon, Receipt or Registered Covered Bond will for all purposes ofthe Trust Deed, Security Agreement and Agency Agreement (except as otherwise required by applicable law orregulatory requirement) be treated as its absolute owner whether or not it is overdue and regardless of any notice ofownership, trust or any interest thereof or therein, any writing thereon, or any theft or loss thereof and no person shall beliable for so treating such Holder.
Transfer of Registered Covered Bonds
2.04 A Registered Covered Bond may, upon the terms and subject to the terms and conditions set forth in the AgencyAgreement and as required by law, be transferred in whole or in part only (provided that such part is a SpecifiedDenomination specified in the Final Terms) upon the surrender of the Registered Covered Bond to be transferred,together with a form of transfer duly completed and executed, at the specified office of the Registrar. A new RegisteredCovered Bond will be issued to the transferee and, in the case of a transfer of part only of a Registered Covered Bond, anew Registered Covered Bond in respect of the balance not transferred will be issued to the transferor.
2.05 Each new Registered Covered Bond to be issued upon the registration of the transfer of a Registered CoveredBond will, within three Relevant Banking Days of the transfer date be available for collection by each relevant Holder atthe specified office of the Registrar or, at the option of the Holder requesting such transfer, be mailed (by uninsured mailat the risk of the Holder(s) entitled thereto) to such address(es) as may be specified by such Holder. For these purposes, aform of transfer received by the Registrar or the Issuing and Paying Agent after the Record Date in respect of anypayment due in respect of Registered Covered Bonds shall be deemed not to be effectively received by the Registrar orthe Issuing and Paying Agent until the day following the due date for such payment.
2.06 Transfers of beneficial interests in Rule 144A Global Covered Bonds (as defined below) and Regulation SGlobal Covered Bonds (as defined below) (together, the “Registered Global Covered Bonds”) will be effected by DTC,CDS, Euroclear or Clearstream, Luxembourg, as the case may be, and, in turn, by other participants and, if appropriate,indirect participants in such clearing systems acting on behalf of beneficial transferors and transferees of such interests.The laws of some States within the United States require that certain persons take physical delivery of securities indefinitive form. Consequently, the ability to transfer Covered Bonds represented by a Registered Global Covered Bondto such persons may depend upon the ability to exchange such Covered Bonds for Covered Bonds in definitive form.Similarly, because DTC can only act on behalf of Direct Participants in the DTC system who in turn act on behalf ofIndirect Participants, the ability of a person having an interest in Covered Bonds represented by a Registered GlobalCovered Bond accepted by DTC to pledge such Covered Bonds to persons or entities that do not participate in the DTCsystem or otherwise take action in respect of such Covered Bonds may depend upon the ability to exchange suchCovered Bonds for Covered Bonds in definitive form. A beneficial interest in a Registered Global Covered Bond will,subject to compliance with all applicable legal and regulatory restrictions, be transferable for Registered DefinitiveCovered Bonds or for a beneficial interest in another Registered Global Covered Bond only in the SpecifiedDenominations set out in the applicable Final Terms and only in accordance with the rules and operating procedures for
A13, 4.5
A13, 4.14
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the time being of DTC, CDS, Euroclear or Clearstream, Luxembourg, as the case may be, and in accordance with theterms and conditions specified in the Agency Agreement. Transfers of a Registered Global Covered Bond registered inthe name of a nominee for DTC or CDS shall be limited to transfers of such Registered Global Covered Bond, in wholebut not in part, to another nominee of DTC or CDS, as applicable, or to a successor of DTC or CDS, as applicable, orsuch successor’s nominee.
2.07 Subject as provided in Conditions 2.09, 2.10, 2.11 and 2.12, upon the terms and subject to the conditions setforth in the Agency Agreement, a Registered Definitive Covered Bond may be transferred in whole or in part in theauthorised denominations set out in the applicable Final Terms. In order to effect any such transfer (a) the holder orholders must (i) surrender the Registered Covered Bond for registration of the transfer of the Registered Covered Bond(or the relevant part of the Registered Covered Bond) at the specified office of the Registrar or any Transfer Agent, withthe form of transfer thereon duly executed by the holder or holders thereof or his or their, attorney or attorneys dulyauthorised in writing, and (ii) complete and deposit such other certifications as may be required by the Registrar or, asthe case may be, the relevant Transfer Agent, and (b) the Registrar or, as the case may be, the relevant Transfer Agentmust, after due and careful enquiry, be satisfied with the documents of title and the identity of the person making therequest.
Any such transfer will be subject to such reasonable regulations as the Issuer, the Bond Trustee and the Registrar mayfrom time to time prescribe (the initial such regulations being set out in the Agency Agreement).
Subject as provided above, the Registrar or, as the case may be, the relevant Transfer Agent will, within three businessdays (being for this purpose a day on which banks are open for business in the city where the specified office of theRegistrar or, as the case may be, the relevant Transfer Agent is located) of the request (or such longer period as may berequired to comply with, any applicable fiscal or other laws or regulations), authenticate and deliver, or procure theauthentication and delivery of, at its specified office to the transferee or (at the risk of the transferee) send by uninsuredmail to such address as the transferee may request, a new Registered Definitive Covered Bond of a like aggregatenominal amount to the Registered Definitive Covered Bond (or the relevant part of the Registered Definitive CoveredBond) transferred.
In the case of the transfer of part only of a Registered Definitive Covered Bond, a new Registered Definitive CoveredBond in respect of the balance of the Registered Definitive Covered Bond not transferred will (in addition to the newRegistered Definitive Covered Bond in respect of the nominal amount transferred) be so authenticated and delivered or(at the risk of the transferor) so sent by uninsured mail to the address specified by the transferor.
2.08 For the purposes of these Terms and Conditions:
(a) “Distribution Compliance Period” means the period that ends 40 days after the completion of thedistribution of the relevant Tranche of Covered Bonds, as certified by the relevant Dealer (in the caseof a non-syndicated issue) or the relevant Lead Manager (in the case of a syndicated issue);
(b) “Legended Covered Bonds” means Registered Covered Bonds (whether in definitive form orrepresented by a Registered Global Covered Bond) sold in private transactions to QIBs in accordancewith the requirements of Rule 144A;
(c) “NGCB” means a Temporary Global Covered Bond or a Permanent Global Covered Bond, in eithercase in respect of which the applicable Final Terms specify that it is a new global covered bond;
(d) “QIB” means a “qualified institutional buyer” within the meaning of Rule 144A;
(e) “Regulation S” means Regulation S under the Securities Act;
(f) “Regulation S Global Covered Bond” means a Registered Global Covered Bond representingCovered Bonds sold outside the United States in reliance on Regulation S;
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(g) “Relevant Banking Day” means a day on which commercial banks are open for general business(including dealings in foreign exchange and foreign currency deposits) in the place where thespecified office of the Registrar is located and, in the case only of an exchange of a Bearer CoveredBond for a Registered Covered Bond, where such request for exchange is made to the Issuing andPaying Agent, in the place where the specified office of the Issuing and Paying Agent is located;
(h) “Rule 144A” means Rule 144A under the Securities Act;
(i) “Rule 144A Global Covered Bond” means a Registered Global Covered Bond representing CoveredBonds sold in the United States to QIBs in reliance on Rule 144A;
(j) “Securities Act” means the United States Securities Act of 1933, as amended; and
(k) the “transfer date” shall be the Relevant Banking Day following the day on which the relevantRegistered Covered Bond shall have been surrendered for transfer in accordance with Condition 2.04.
2.09 The issue of new Registered Covered Bonds on transfer will be effected without charge by or on behalf of theIssuer, the Issuing and Paying Agent or the Registrar, but upon payment by the applicant of (or the giving by theapplicant of such indemnity as the Issuer, the Issuing and Paying Agent or the Registrar may require in respect of) anytax, duty or other governmental charges which may be imposed in relation thereto.
2.10 In the event of a partial redemption of Covered Bonds under Condition 6, the Issuer shall not be required toregister the transfer of any Registered Covered Bond, or part of a Registered Covered Bond called for partial redemption.
2.11 Prior to expiry of the applicable Distribution Compliance Period, transfers by the holder of, or of a beneficialinterest in, a Regulation S Global Covered Bond to a transferee in the United States or who is a U.S. person will only bemade:
(a) upon receipt by the Registrar of a written certification substantially in the form set out in the AgencyAgreement, amended as appropriate (a “Transfer Certificate”), copies of which are available fromthe specified office of the Registrar or any Transfer Agent, from the transferor of the Covered Bond orbeneficial interest therein to the effect that such transfer is being made to a person whom the transferorreasonably believes is a QIB in a transaction meeting the requirements of Rule 144A;
(b) otherwise pursuant to the Securities Act or an exemption therefrom, subject to receipt by the Issuer ofsuch satisfactory evidence as the Issuer may reasonably require, which may include an opinion ofUnited States counsel, that such transfer is in compliance with any applicable securities laws of anystate of the United States,
and, in each case, in accordance with any applicable securities laws of any state of the United States or anyother jurisdiction.
In the case of (a) above, such transferee may take delivery through a Legended Covered Bond in global ordefinitive form. Prior to the end of the applicable Distribution Compliance Period, beneficial interests inRegulation S Covered Bonds registered in the name of a nominee for DTC may only be held through theaccounts of Euroclear and Clearstream, Luxembourg. After expiry of the applicable Distribution CompliancePeriod: (A) beneficial interests in Regulation S Global Covered Bonds registered in the name of a nominee forDTC may be held through DTC directly, by a participant in DTC or indirectly through a participant in DTC;and (B) such certification requirements will no longer apply to such transfers.
2.12 Transfers of Legended Covered Bonds or beneficial interests therein may be made:
(a) to a transferee who takes delivery of such interest through a Regulation S Global Covered Bond, uponreceipt by the Registrar of a duly completed Transfer Certificate from the transferor to the effect thatsuch transfer is being made in accordance with Regulation S and that, in the case of a Regulation S
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Global Covered Bond registered in the name of a nominee for DTC, if such transfer is being madeprior to expiry of the applicable Distribution Compliance Period, the interests in the Covered Bondsbeing transferred will be held immediately thereafter through CDS, Euroclear and/or Clearstream,Luxembourg; or
(b) to a transferee who takes delivery of such interest through a Legended Covered Bond where thetransferee is a person whom the transferor reasonably believes is a QIB in a transaction meeting therequirements of Rule 144A, without certification; or
(c) otherwise pursuant to the Securities Act or an exemption therefrom, subject to receipt by the Issuer ofsuch satisfactory evidence as the Issuer may reasonably require, which may include an opinion ofUnited States counsel, that such transfer is in compliance with any applicable securities laws of anystate of the United States,
and, in each case, in accordance with any applicable securities laws of any state of the United States or anyother jurisdiction.
Upon the transfer, exchange or replacement of Legended Covered Bonds, or upon specific request for removal of thelegend therein, the Registrar shall deliver only Legended Covered Bonds or refuse to remove the Legend therein, as thecase may be, unless there is delivered to the Issuer such satisfactory evidence as may reasonably be required by theIssuer, which may include an opinion of United States counsel, that neither the Legend nor the restrictions on transfer setforth therein are required to ensure compliance with the provisions of the Securities Act.
3. Status of the Covered Bonds
The Covered Bonds constitute deposit liabilities of the Issuer for purposes of the Bank Act, however the Covered Bondswill not be insured under the Canada Deposit Insurance Corporation Act (Canada), and will constitute legal, valid andbinding direct, unconditional, unsubordinated and unsecured obligations of the Issuer and rank pari passu with alldeposit liabilities of the Issuer without any preference among themselves and at least pari passu with all otherunsubordinated and unsecured obligations of the Issuer, present and future (except as otherwise prescribed by law).Unless otherwise specified in the Final Terms, the deposits to be evidenced by the Covered Bonds will be taken by thehead office of the Issuer in Montréal, but without prejudice to the provisions of Condition 9.
4. Guarantee
Payment of Guaranteed Amounts in respect of the Covered Bonds when the same shall become Due for Payment hasbeen unconditionally and irrevocably guaranteed by the Guarantor (the “Covered Bond Guarantee”) in favour of theBond Trustee (for and on behalf of the Covered Bondholders) following a Covered Bond Guarantee Activation Eventpursuant to the terms of the Trust Deed. The Guarantor shall have no obligation under the Covered Bond Guarantee topay any Guaranteed Amounts until a Covered Bond Guarantee Activation Event (as defined below) has occurred. Theobligations of the Guarantor under the Covered Bond Guarantee are direct and, following the occurrence of a CoveredBond Guarantee Activation Event, unconditional and, except as provided in the Guarantee Priorities of Payment,unsubordinated obligations of the Guarantor, which are secured as provided in the Security Agreement. For the purposesof these Terms and Conditions, a “Covered Bond Guarantee Activation Event” means the earlier to occur of (i) anIssuer Event of Default together with the service of an Issuer Acceleration Notice on the Issuer and the service of aNotice to Pay on the Guarantor; and (ii) a Guarantor Event of Default together with the service of a GuarantorAcceleration Notice on the Issuer and the Guarantor. If a Notice to Pay is served on the Guarantor, the Guarantor shallpay Guaranteed Amounts in respect of the Covered Bonds on the Original Due for Payment Dates or, if applicable, theExtended Due for Payment Date.
Any payment made by the Guarantor under the Covered Bond Guarantee shall (unless such obligation shall have beendischarged as a result of the payment of Excess Proceeds to the Bond Trustee pursuant to Condition 7) discharge protanto the obligations of the Issuer in respect of such payment under the Covered Bonds, Receipts and Coupons exceptwhere such payment has been declared void, voidable or otherwise recoverable in whole or in part and recovered fromthe Bond Trustee or the holders of the Covered Bonds.
A13, 4.6A13, 4.7
A6, 1A6, 2
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5. Interest
Interest
5.01 Covered Bonds may be interest-bearing or non interest-bearing. The Interest Basis is specified in the applicableFinal Terms. Words and expressions appearing in this Condition 5 and not otherwise defined herein shall have themeanings given to them in Condition 5.09.
Interest on Fixed Rate Covered Bonds
5.02 Each Fixed Rate Covered Bond bears interest on its Outstanding Principal Amount from and including theInterest Commencement Date at the rate(s) per annum equal to the Rate(s) of Interest. Interest will be payable in arrearson the Interest Payment Date(s) in each year up to and including the Final Maturity Date if that does not fall on anInterest Payment Date.
Unless otherwise provided in the applicable Final Terms, the amount of interest payable on each Interest Payment Datein respect of the Fixed Interest Period ending on, but excluding, such date will amount to the Fixed Coupon Amount.Payments of interest on any Interest Payment Date will, if so specified in the applicable Final Terms, amount to theBroken Amount(s) so specified.
As used in these Terms and Conditions, “Fixed Interest Period” means the period from and including an InterestPayment Date (or the Interest Commencement Date) to but excluding the next (or first) Interest Payment Date.
Interest will be calculated on the Calculation Amount of the Fixed Rate Covered Bonds and will be paid to the Holdersof the Covered Bonds (in the case of a Global Covered Bond, interest will be paid to Clearstream, Luxembourg and/orEuroclear and/or DTC and/or CDS for distribution by them to Relevant Account Holders in accordance with their usualrules and operating procedures). If interest is required to be calculated for a period ending other than on an InterestPayment Date, or if no Fixed Coupon Amount is specified in the applicable Final Terms, such interest shall be calculatedin accordance with Condition 5.08.
Notwithstanding anything else in this Condition 5.02, if an Extended Due for Payment Date is specified in the FinalTerms, interest following the Due for Payment Date will continue to accrue and be payable on any unpaid amount inaccordance with Condition 5 at a Rate of Interest determined in accordance with Condition 5.03 (in the same manner asthe Rate of Interest for Floating Rate Covered Bonds).
Interest on Floating Rate Covered Bonds
5.03 Interest Payment Dates
Each Floating Rate Covered Bond bears interest on its Outstanding Principal Amount from (and including) the InterestCommencement Date and such interest will be payable in arrears on either:
(a) the Specified Interest Payment Date(s) (each an “Interest Payment Date”) in each year specified inthe applicable Final Terms; or
(b) if no Specified Interest Payment Date(s) is/are specified in the applicable Final Terms, each date (eachan “Interest Payment Date”) which falls the number of months or other period specified as theSpecified Period in the applicable Final Terms after the preceding Interest Payment Date or, in thecase of the first Interest Payment Date, after the Interest Commencement Date.
Such interest will be payable in respect of each Interest Period (which expression, shall, in these Terms and Conditions,mean the period from (and including) an Interest Payment Date (or the Interest Commencement Date) to (but excluding)the next (or first) Interest Payment Date). Interest will be calculated on the Calculation Amount of the Floating RateCovered Bonds and will be paid to the Holders of the Covered Bonds (in the case of a Global Covered Bond, interest
A13, 4.8(ii)
A13, 4.8(vi)
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will be paid to Clearstream, Luxembourg and/or Euroclear and/or DTC and/or CDS for distribution by them to RelevantAccount Holders in accordance with their usual rules and operating procedures).
Rate of Interest
Where the Screen Rate Determination is specified in the applicable Final Terms as the manner in which the Rate ofInterest is to be determined, the Rate of Interest for each Interest Period will be determined by the Calculation Agent onthe following basis:
(a) the Calculation Agent will determine the Reference Rate (if there is only one quotation for theReference Rate on the Relevant Screen Page) or, as the case may require, the arithmetic mean(rounded, if necessary, to the nearest ten thousandth of a percentage point, 0.00005 being roundedupwards) of the quotations for the Reference Rate in the relevant currency for a period of the durationof the relevant Interest Period on the Relevant Screen Page as of the Relevant Time on the relevantInterest Determination Date;
(b) if, on any Interest Determination Date, no rate so appears or, as the case may be, if fewer than twoquotations for the Reference Rate so appear on the Relevant Screen Page or if the Relevant ScreenPage is unavailable, the Calculation Agent will request appropriate quotations of the Reference Rateand will determine the arithmetic mean (rounded as described above) of the rates at which deposits inthe relevant currency are offered by the Reference Banks at approximately the Relevant Time on theInterest Determination Date to prime banks in the London interbank market in the case of LIBOR orin the Euro-zone (as defined herein) interbank market in the case of EURIBOR for a period of theduration of the relevant Interest Period and in an amount that is representative for a single transactionin the relevant market at the relevant time;
(c) if, on any Interest Determination Date, only two or three rates are so quoted, the Calculation Agentwill determine the arithmetic mean (rounded as described above) of the rates so quoted; or
(d) if fewer than two rates are so quoted, the Calculation Agent will determine the arithmetic mean(rounded as described above) of the rates for the Reference Rate quoted by four major banks in theFinancial Centre as selected by the Calculation Agent, at approximately 11.00 a.m. (Financial Centretime) on the first day of the relevant Interest Period for loans in the relevant currency to leadingEuropean banks for a period for the duration of the relevant Interest Period and in an amount that isrepresentative for a single transaction in the relevant market at the relevant time,
and the Rate of Interest applicable to such Covered Bonds during each Interest Period will be the sum of theMargin specified in the Final Terms and the Reference Rate or, as the case may be, the arithmetic mean(rounded as described above) of the rates so determined, provided however that if the Calculation Agent isunable to determine a Reference Rate or, as the case may be, an arithmetic mean of rates in accordance with theabove provisions in relation to any Interest Period, the Rate of Interest applicable to such Covered Bonds duringsuch Interest Period will be the sum of the Margin and the rate or, as the case may be, the arithmetic mean(rounded as described above) of the rates determined in relation to such Covered Bonds in respect of the lastpreceding Interest Period.
ISDA Rate Covered Bonds
5.04 Where ISDA Determination is specified in the Final Terms as the manner in which the Rate of Interest is to bedetermined, the Rate of Interest for each Interest Period will be the relevant ISDA Rate plus or minus (as indicated in theapplicable Final Terms) the Margin, if any. For purposes of this Condition 5.04, “ISDA Rate” for an Interest Periodmeans a rate equal to the Fixed Rates, Fixed Amounts, Floating Rates or Floating Amounts, as the case may be, as setout in the applicable Final Terms, as would have applied (regardless of any event of default or termination event or taxevent thereunder) if the Issuer had entered into a schedule and confirmation and credit support annex, if applicable, inrespect of the relevant Tranche or Series of Covered Bonds, as applicable, with the Holder of such Covered Bond underthe terms of an agreement to which the ISDA Definitions applied and under which:
A13, 4.8(ii)A13, 4.8(viii)A13, 4.8(ix)A13, 4.8(x)
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the Fixed Rate Payer, Fixed Amount Payer, Floating Rate Payer or, as the case may be, Floating Amount Payer isthe Issuer (as specified in the Final Terms);
the Effective Date is the Interest Commencement Date;
the Floating Rate Option (which may refer to a Rate Option or a Price Option, specified in the ISDA Definitions) isas specified in the applicable Final Terms;
the Designated Maturity is the period specified in the applicable Final Terms;
the Agent is the Calculation Agent;
the Calculation Periods are the Interest Periods;
the Payment Dates are the Interest Payment Dates;
the relevant Reset Date is the day specified in the applicable Final Terms;
the Calculation Amount is the principal amount of such Covered Bond;
the Day Count Fraction applicable to the calculation of any amount is that specified in the Final Terms (which maybe Actual/Actual, Actual/Actual (ISDA), Actual/365 (Fixed), Actual/360, 30E/360, Eurobond Basis, 30/360,360/360, Bond Basis, 30E/360 (ISDA), Actual/Actual (ICMA) or Act/Act (ICMA)), or if none is so specified, asmay be determined in accordance with the ISDA Definitions; and
the Business Day Convention applicable to any date is that specified in the Final Terms (which may be FollowingBusiness Day Convention, Modified Following Business Day Convention, Modified Business Day Convention,Preceding Business Day Convention, FRN Convention or Eurodollar Convention), or if none is so specified, as maybe determined in accordance with the ISDA Definitions.
For the purposes of this Condition 5.04, “Floating Rate”, “Calculation Agent”, “Floating Rate Option”, “DesignatedMaturity” and “Reset Date” have the meanings given to those terms in the ISDA Definitions.
Maximum or Minimum Interest Rate
5.05 If any Maximum or Minimum Interest Rate is specified in the Final Terms, then the Rate of Interest shall in noevent be greater than the maximum or be less than the minimum so specified.
Accrual of Interest after the due date
5.06 Interest will cease to accrue as from the due date for redemption therefor (or, in the case of an InstalmentCovered Bond, in respect of each Instalment Amount, on the due date for payment of the relevant Instalment Amount)unless upon due presentation or surrender thereof (if required), payment in full of the Final Redemption Amount or therelevant Instalment Amount is improperly withheld or refused or default is otherwise made in the payment thereof. Insuch event, interest shall continue to accrue on the principal amount in respect of which payment has been improperlywithheld or refused or default has been made (as well after as before any demand or judgment) at the Rate of Interestthen applicable or such other rate as may be specified for this purpose in the Final Terms if permitted by applicable law(“Default Rate”) until the date on which, upon due presentation or surrender of the relevant Covered Bond (if required),the relevant payment is made or, if earlier (except where presentation or surrender of the relevant Covered Bond is notrequired as a precondition of payment), the seventh day after the date on which, the Issuing and Paying Agent or, as thecase may be, the Registrar having received the funds required to make such payment, notice is given to the Holders ofthe Covered Bonds in accordance with Condition 14 that the Issuing and Paying Agent or, as the case may be, theRegistrar has received the required funds (except to the extent that there is failure in the subsequent payment thereof tothe relevant Holder).
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Interest Amount(s), Calculation Agent and Reference Banks
5.07 If a Calculation Agent is specified in the Final Terms, the Calculation Agent, as soon as practicable after theRelevant Time on each Interest Determination Date (or such other time on such date as the Calculation Agent may berequired to calculate any Final Redemption Amount or Instalment Amount, obtain any quote or make any determinationor calculation) will determine the Rate of Interest and calculate the amount(s) of interest payable (the “InterestAmount(s)”) in the manner specified in Condition 5.08 below, calculate the Final Redemption Amount or InstalmentAmount, obtain such quote or make such determination or calculation, as the case may be, and cause the Rate of Interestand the Interest Amounts for each Interest Period and the relevant Interest Payment Date or, as the case may be, the FinalRedemption Amount or any Instalment Amount to be notified to the Issuing and Paying Agent, the Registrar (in the caseof Registered Covered Bonds), the Issuer, the Holders in accordance with Condition 14 and, if the Covered Bonds arelisted on a stock exchange or admitted to listing by any other authority and the rules of such exchange or other relevantauthority so require, such exchange or listing authority as soon as possible after their determination or calculation but inno event later than the fourth London Banking Day thereafter or, if earlier in the case of notification to the stockexchange or other relevant authority, the time required by the relevant stock exchange or listing authority. The InterestAmounts and the Interest Payment Date so notified may subsequently be amended (or appropriate alternativearrangements made by way of adjustment) without notice in the event of an extension or shortening of the InterestPeriod. If the Covered Bonds become due and payable under Condition 7, the Rate of Interest and the accrued interestpayable in respect of the Covered Bonds shall nevertheless continue to be calculated in accordance with this Conditionbut no publication of the Rate of Interest or the Interest Amount so calculated need be made. The determination of eachRate of Interest, Interest Amount, Final Redemption Amount and Instalment Amount, the obtaining of each quote andthe making of each determination or calculation by the Calculation Agent shall (in the absence of manifest error) be finaland binding upon the Issuer and the Holders and neither the Calculation Agent nor any Reference Bank shall have anyliability to the Holders in respect of any determination, calculation, quote or rate made or provided by it.
The Issuer will procure that there shall at all times be such Reference Banks as may be required for the purpose ofdetermining the Rate of Interest applicable to the Covered Bonds and a Calculation Agent, if provision is made for one inthe Terms and Conditions.
If the Calculation Agent is incapable or unwilling to act as such or if the Calculation Agent fails duly to establish theRate of Interest for any Interest Period or to calculate the Interest Amounts or any other requirements, the Bond Trusteeshall determine the Rate of Interest at such rate as, in its absolute discretion (having regard as it shall think fit to theforegoing provision of this Condition, but subject always to any Minimum Rate of Interest or Maximum Rate of Interestspecified in the applicable Final Terms), it shall deem fair and reasonable in all circumstances or, as the case may be, theBond Trustee shall calculate (or appoint an agent to calculate) the Interest Amount(s) in such manner as it shall deem fairand reasonable in all the circumstances and each such determination or calculation shall be deemed to have been madeby the Calculation Agent. The Calculation Agent may not resign its duties without a successor having been appointed asdescribed above.
Calculations and Adjustments
5.08 The amount of interest payable in respect of any Covered Bond for any period shall be calculated by applyingthe Rate of Interest to the Calculation Amount, and, in each case, multiplying such sum by the Day Count Fraction, savethat if the Final Terms specifies a specific amount in respect of such period, the amount of interest payable in respect ofsuch Covered Bond for such Interest Period will be equal to such specified amount.
For the purposes of any calculations referred to in these Terms and Conditions, (a) all percentages resulting from suchcalculations will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point (with 0.000005per cent. being rounded up to 0.00001 per cent.), (b) all Japanese Yen amounts used in or resulting from suchcalculations will be rounded downwards to the next lower whole Japanese Yen amount and (c) all amounts denominatedin any other currency used in or resulting from such calculations will be rounded to the nearest two decimal places insuch currency, with 0.005 being rounded upwards.
Where the Covered Bonds are represented by a Global Covered Bond or where the Specified Denomination of a CoveredBond in definitive form is a multiple of the Calculation Amount, the amount of interest payable in respect of suchCovered Bond shall be the aggregate of the amounts (determined in the manner provided above) for each Calculation
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Amount comprising the Outstanding Principal Amount of the Global Covered Bond or the Specified Denomination of aCovered Bond in definitive form, without any further rounding.
Definitions
5.09 In the Conditions, unless the context otherwise requires, the following defined terms shall have the meanings setout below:
“Banking Day” means, in respect of any city, a day on which commercial banks are open for general business (includingdealings in foreign exchange and foreign currency deposits) in that city.
“Business Day” means (i) in relation to Covered Bonds payable in other than euro, a day (other than a Saturday orSunday) on which commercial banks and foreign exchange markets are open for general business (including dealings inforeign exchange and foreign currency deposits) and settle payments in the relevant currency in the Financial Centre(s)specified in the Final Terms and on which commercial banks and foreign exchange markets settle payments in theprincipal financial centre of the country of the relevant Specified Currency or (ii) in relation to Covered Bonds payable ineuro, a day (other than a Saturday or Sunday) which is a TARGET2 Business Day (as defined below) and on whichcommercial banks and foreign exchange markets are open for general business (including dealings in foreign exchangeand foreign currency deposits) in the Financial Centre(s) specified in the Final Terms.
“Business Day Convention” means a convention for adjusting any date if it would otherwise fall on a day that is not aBusiness Day and the following Business Day Conventions, where specified in the Final Terms in relation to any dateapplicable to any Covered Bonds, shall have the following meanings:
(a) “Following Business Day Convention” means that such date shall be postponed to the first followingday that is a Business Day;
(b) “Modified Following Business Day Convention” or “Modified Business Day Convention” meansthat such date shall be postponed to the first following day that is a Business Day unless that day fallsin the next calendar month in which case that date will be the first preceding day that is a BusinessDay;
(c) “Preceding Business Day Convention” means that such date shall be brought forward to the firstpreceding day that is a Business Day; and
(d) “FRN Convention” or “Eurodollar Convention” means that each such date shall be the date whichnumerically corresponds to the preceding such date in the calendar month which is the number ofmonths specified in the Final Terms after the calendar month in which the preceding such dateoccurred, provided that:
(i) if there is no such numerically corresponding day in the calendar month in which any suchdate should occur, then such date will be the last day which is a Business Day in thatcalendar month;
(ii) if any such date would otherwise fall on a day which is not a Business Day, then such datewill be the first following day which is a Business Day unless that day falls in the nextcalendar month, in which case it will be the first preceding day which is a Business Day; and
(iii) if the preceding such date occurred on the last day in a calendar month which was a BusinessDay, then all subsequent such dates will be the last day which is a Business Day in thecalendar month which is the specified number of months after the calendar month in whichthe preceding such date occurred.
“Calculation Agent” means the Issuing and Paying Agent or such other agent as may be specified in the Final Terms asthe Calculation Agent.
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“Canadian Business Day” means a day (other than a Saturday or Sunday) on which commercial banks are open forgeneral business (including dealings in foreign exchange and foreign currency deposits) in Toronto and Montréal.
“Day Count Fraction” means, in respect of the calculation of an amount for any period of time (each such period an“Accrual Period”), such day count fraction as may be specified in the Final Terms and:
(a) if “Actual/Actual” or “Actual/Actual (ISDA)” is so specified, means the actual number of days inthe Accrual Period divided by 365 (or, if any portion of the Accrual Period falls in a leap year, thesum of (A) the actual number of days in that portion of the Accrual Period falling in a leap yeardivided by 366 and (B) the actual number of days in that portion of the Accrual Period falling in anon-leap year divided by 365);
(b) if “Actual/365 (Fixed)” is so specified, means the actual number of days in the Accrual Perioddivided by 365;
(c) if “Actual/360” is so specified, means the actual number of days in the Accrual Period divided by360;
(d) if “30E/360” or “Eurobond Basis” is specified in the applicable Final Terms, the number of days inthe Interest Period divided by 360, calculated on a formula basis as follows:
Day Count Fraction = [360 x (Y2 - Y1)] + [30 x (M2 - M1)] + (D2 - D1)360
where:
“Y1” is the year, expressed as a number, in which the first day of the Interest Period falls;
“Y2” is the year, expressed as a number, in which the day immediately following the last day includedin the Interest Period falls;
“M1” is the calendar month, expressed as a number, in which the first day of the Interest Period falls;
“M2” is the calendar month, expressed as a number, in which the day immediately following the lastday included in the Interest Period falls;
“D1” is the first calendar day, expressed as a number, of the Interest Period, unless such number wouldbe 31, in which case D1 will be 30; and
“D2” is the calendar day, expressed as a number, immediately following the last day included in theInterest Period, unless such number would be 31, in which case D2, will be 30.
(e) if “30/360”, “360/360” or “Bond Basis” is specified in the applicable Final Terms, the number of daysin the Interest Period divided by 360, calculated on a formula basis as follows:
Day Count Fraction = [360 x (Y2 - Y1)] + [30 x (M2 - M1)] + (D2 - D1)360
where:
“Y1” is the year, expressed as a number, in which the first day of the Interest Period falls;
“Y2” is the year, expressed as a number, in which the day immediately following the last day includedin the Interest Period falls;
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“M1” is the calendar month, expressed as a number, in which the first day of the Interest Period falls;
“M2” is the calendar month, expressed as number, in which the day immediately following the last dayincluded in the Interest Period falls;
“D1” is the first calendar day, expressed as a number, of the Interest Period, unless such number wouldbe 31, in which case D1 will be 30; and
“D2” is the calendar day, expressed as a number, immediately following the last day included in theInterest Period, unless such number would be 31 and D1 is greater than 29, in which case D2 will be30; and
(f) if “30E/360 (ISDA)” is so specified, means the number of days in the Accrual Period divided by 360,calculated on a formula basis as follows:
Day Count Fraction = [360 x (Y2 - Y1)] + [30 x (M2 - M1)] + (D2 - D1)360
where:
“Y1” is the year, expressed as a number, in which the first day of the Accrual Period falls;
“Y2” is the year, expressed as a number, in which the day immediately following the last day includedthe Accrual Period falls;
“M1” is the calendar month, expressed as a number, in which the first day of the Accrual Period falls;
“M2” is the calendar month, expressed as a number, in which the day immediately following the lastday included in the Accrual Period falls;
“D1” is the first calendar day, expressed as a number, of the Accrual Period, unless (i) that day is thelast day of February or (ii) such number would be 31, in which case D1 will be 30; and
“D2” is the calendar day, expressed as a number, immediately following the last day included in theAccrual Period, unless (i) that day is the last day of February but not the Final Maturity Date or (ii)such number would be 31, in which case D2 will be 30; and
(g) if “Actual/Actual (ICMA)” or “Act/Act (ICMA)” is specified in the applicable Final Terms, afraction equal to “number of days accrued/number of days in year”, as such terms are used in Rule 251of the statutes, by-laws, rules and recommendations of the International Capital Market Association(the “ICMA Rule Book”), calculated in accordance with Rule 251 of the ICMA Rule Book as appliedto non U.S. dollar denominated straight and convertible bonds issued after December 31, 1998, asthough the interest coupon on a bond were being calculated for a coupon period corresponding to theInterest Period.
“Determination Date” means such dates as specified in the applicable Final Terms.
“Determination Period” means the period from and including a Determination Date in any year to but excluding thenext Determination Date (including, where either the Interest Commencement Date or the final Interest Payment Date isnot a Determination Date, the period commencing on the first Determination Date prior to, and ending on the firstDetermination Date falling after, such date).
“Euro-zone” means the region comprised of those member states of the European Union participating in the EuropeanMonetary Union from time to time.
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“Financial Centre” means such financial centre or centres as may be specified in relation to the relevant currency for thepurposes of the definition of “Business Day” in the ISDA Definitions or indicated in the Final Terms or, in the case ofCovered Bonds denominated in euro, such financial centre or centres as the Calculation Agent may select.
“Interest Commencement Date” means the date of issue (the “Issue Date”) of the Covered Bonds (as specified in theFinal Terms) or such other date as may be specified as such in the Final Terms.
“Interest Determination Date” means, in respect of any Interest Period, the date falling such number (if any) ofBanking Days in such city(ies) as may be specified in the Final Terms prior to the first day of such Interest AccrualPeriod, or if none is specified:
(a) in the case of Covered Bonds denominated in Pounds Sterling or in another currency if so specified inthe applicable Final Terms, the first day of such Interest Period; or
(b) in any other case, the date falling two London Banking Days (or, in the case of EURIBOR orEUROLIBOR, two TARGET2 Business Days) prior to the first day of such Interest Accrual Period.
“Interest Payment Date” means the date or dates specified as such in the Final Terms and, as the same may be adjustedin accordance with the Business Day Convention, if any, specified in the Final Terms or if the Business Day Conventionis the FRN Convention and an interval of a number of calendar months is specified in the Final Terms as being theInterest Period, each of such dates as may occur in accordance with the FRN Convention at such specified period ofcalendar months following the Issue Date of the Covered Bonds (in the case of the first Interest Payment Date) or theprevious Interest Payment Date (in any other case).
“Interest Period” means each successive period beginning on and including an Interest Payment Date and ending on butexcluding the next succeeding Interest Payment Date, provided always that the first Interest Period shall commence onand include the Interest Commencement Date and the final Interest Period shall end on but exclude the Final MaturityDate.
“Interest Period End Date” means the date or dates specified as such in, or determined in accordance with theprovisions of, the Final Terms and, as the same may be adjusted in accordance with the Business Day Convention, if any,specified in the Final Terms or, if the Business Day Convention is the FRN Convention and an interval of a number ofcalendar months is specified in the Final Terms as the Interest Accrual Period, such dates as may occur in accordancewith the FRN Convention at such specified period of calendar months following the Interest Commencement Date (inthe case of the first Interest Period End Date) or the previous Interest Period End Date (in any other case) or, if none ofthe foregoing is specified in the Final Terms, means the date or each of the dates which correspond with the InterestPayment Date(s) in respect of the Covered Bonds.
“ISDA Definitions” means the 2006 ISDA Definitions (as amended, supplemented and updated as at the date of issue ofthe first Tranche of the Covered Bonds of the relevant Series (as specified in the Final Terms) as published by theInternational Swaps and Derivatives Association, Inc.).
“Outstanding Principal Amount” means, in respect of a Covered Bond, its principal amount less, in respect of anyInstalment Covered Bond, any principal amount on which interest shall have ceased to accrue in accordance withCondition 5.06 or otherwise as indicated in the Final Terms.
“Rate of Interest” means the rate or rates (expressed as a percentage per annum) or amount or amounts (expressed as aprice per unit of relevant currency) of interest payable in respect of the Covered Bonds specified in, or calculated ordetermined in accordance with the provisions of, the Final Terms.
“Reference Banks” means such banks as may be specified in the Final Terms as the Reference Banks, or, if none arespecified, “Reference Banks” has the meaning given in the ISDA Definitions, mutatis mutandis.
“Reference Rate” means the relevant LIBOR or EURIBOR rate specified in the applicable Final Terms.
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“Relevant Time” means the time as of which any rate is to be determined as specified in the Final Terms (which in thecase of LIBOR means London time or in the case of EURIBOR means Central European Time) or, if none is specified,at which it is customary to determine such rate.
“Reuters Screen” means, when used in connection with a designated page and any designated information, the displaypage so designated on the Reuters Market 3000 (or such other page as may replace that page on that service for thepurpose of displaying such information).
“TARGET2 Business Day” means, a day in which the TARGET2 System is open.
Zero-Coupon Covered Bonds
5.10 If any Final Redemption Amount in respect of any Zero Coupon Covered Bond is not paid when due, interestshall accrue on the overdue amount at a rate per annum (expressed as a percentage per annum) equal to the AmortizationYield defined in the Final Terms or at such other rate as may be specified for this purpose in the Final Terms until thedate on which, upon due presentation or surrender of the relevant Covered Bond (if required), the relevant payment ismade or, if earlier (except where presentation or surrender of the relevant Covered Bond is not required as a preconditionof payment), the seventh day after the date on which, the Issuing and Paying Agent or, as the case may be, the Registrarhaving received the funds required to make such payment, notice is given to the Holders of the Covered Bonds inaccordance with Condition 14 that the Issuing and Paying Agent or, as the case may be, the Registrar has received therequired funds (except to the extent that there is failure in the subsequent payment thereof to the relevant Holder). Theamount of any such interest shall be calculated in accordance with the provisions of Condition 5.08 as if the Rate ofInterest was the Amortization Yield, the Outstanding Principal Amount was the overdue sum and the Day Count Fractionwas as specified for this purpose in the Final Terms or, if not so specified, 30E/360 (as defined in Condition 5.09).
6. Redemption and Purchase
6.01 Unless previously redeemed, or purchased and cancelled or unless such Covered Bond is stated in the FinalTerms as having no fixed maturity date, this Covered Bond shall be redeemed at its Final Redemption Amount specifiedin the applicable Final Terms in the Specified Currency on the Final Maturity Date.
Without prejudice to Condition 7, if an Extended Due for Payment Date is specified as applicable in the Final Terms fora Series of Covered Bonds and the Issuer has failed to pay the Final Redemption Amount on the Final Maturity Datespecified in the Final Terms (or after expiry of the grace period set out in Condition 7.01(a)) and, following service of aNotice to Pay on the Guarantor by no later than the date falling one Business Day prior to the Extension DeterminationDate, the Guarantor has insufficient moneys available in accordance with the Guarantee Priority of Payments to pay infull the Guaranteed Amounts corresponding to the Final Redemption Amount of the relevant Series of Covered Bonds onthe date falling on the earlier of (a) the date which falls two Business Days after service of such Notice to Pay on theGuarantor or, if later, the Final Maturity Date (or, in each case, after the expiry of the grace period set out in Condition7.02) under the terms of the Covered Bond Guarantee or (b) the Extension Determination Date, then (subject as providedbelow) payment of the unpaid amount by the Guarantor under the Covered Bond Guarantee shall be deferred until theExtended Due for Payment Date, provided that in respect of any amount representing the Final Redemption Amount dueand remaining unpaid on the earlier of (a) and (b) above, the Guarantor will apply any moneys available (after paying orproviding for payment of higher ranking or pari passu amounts in accordance with the Guarantee Priority of Payments)to pay the Guaranteed Amounts corresponding to the Final Redemption Amount of the relevant Series of Covered Bondson any Interest Payment Date thereafter up to (and including) the relevant Extended Due for Payment Date.
The Issuer shall confirm to the Issuing and Paying Agent as soon as reasonably practicable and in any event at least 4Business Days prior to the Final Maturity Date of a Series of Covered Bonds whether payment will be made in full of theFinal Redemption Amount in respect of such Series of Covered Bonds on that Final Maturity Date. Any failure by theIssuer to notify the Issuing and Paying Agent shall not affect the validity or effectiveness of the extension of maturity.
The Guarantor shall notify the relevant holders of the Covered Bonds (in accordance with Condition 14), the RatingAgencies, the Bond Trustee, the Issuing and Paying Agent and the Registrar (in the case of Registered Covered Bonds)as soon as reasonably practicable and in any event at least one Business Day prior to the dates specified in (a) and (b) of
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the second paragraph of this Condition 6.01 of any inability of the Guarantor to pay in full the Guaranteed Amountscorresponding to the Final Redemption Amount in respect of a Series of Covered Bonds pursuant to the Covered BondGuarantee. Any failure by the Guarantor to notify such parties shall not affect the validity or effectiveness of theextension nor give rise to any rights in any such party.
In the circumstances outlined above, the Guarantor shall on the earlier of (a) the date falling two Business Days after theservice of a Notice to Pay on the Guarantor or if later the Final Maturity Date (or, in each case, after the expiry of theapplicable grace period set out in Condition 7.02) and (b) the Extension Determination Date, under the Covered BondGuarantee, apply the moneys (if any) available (after paying or providing for payment of higher ranking or pari passuamounts in accordance with the Guarantee Priority of Payments) pro rata in part payment of an amount equal to theFinal Redemption Amount of each Covered Bond of the relevant Series of Covered Bonds and shall pay GuaranteedAmounts constituting the Scheduled Interest in respect of each such Covered Bond on such date. The obligation of theGuarantor to pay any amounts in respect of the balance of the Final Redemption Amount not so paid shall be deferred asdescribed above. Such failure to pay by the Guarantor shall not constitute a Guarantor Event of Default.
Any discharge of the obligations of the Issuer as the result of the payment of Excess Proceeds to the Bond Trustee shallbe disregarded for the purposes of determining the amounts to be paid by the Guarantor under the Covered BondGuarantee in connection with this Condition 6.01.
For the purposes of these Terms and Conditions:
“Extended Due for Payment Date” means, in relation to any Series of Covered Bonds, the date, if any, specified assuch in the applicable Final Terms to which the payment of all or (as applicable) part of the Final Redemption Amountpayable on the Final Maturity Date will be deferred in the event that the Final Redemption Amount is not paid in full onthe Extension Determination Date.
“Extension Determination Date” means, in respect of a Series of Covered Bonds, the date falling two Business Daysafter the expiry of seven days from (and including) the Final Maturity Date of such Covered Bonds.
“Guarantee Priority of Payments” means the priority of payments relating to moneys received by the Cash Managerfor and on behalf of the Guarantor and moneys standing to the credit of the Guarantor Accounts, to be paid on eachGuarantor Payment Date in accordance with the Guarantor Agreement.
“Rating Agency” means any one of Moody’s Investors Service, Inc., Fitch Ratings, Inc. and DBRS Limited, to theextent that at the relevant time they provide ratings in respect of the then outstanding Covered Bonds, or their successorsand “Rating Agencies” means more than one Rating Agency.
Early Redemption for Taxation Reasons
6.02 If, in relation to any Series of Covered Bonds (i) as a result of any amendment to, clarification of, or changeincluding any announced proposed change in the laws or regulations, or the application or interpretation thereof ofCanada or the United Kingdom or any political subdivision thereof or any authority or agency therein or thereof havingpower to tax or, in the case of Covered Bonds issued by a branch of the Issuer outside Canada, of the country in whichsuch branch is located or of any political subdivision thereof or any authority or agency therein or thereof having powerto tax or in the interpretation or administration of any such laws or regulations which becomes effective on or after theIssue Date of such Covered Bonds or any other date specified in the Final Terms, (ii) any judicial decision,administrative pronouncement, published or private ruling, regulatory procedure, rule, notice, announcement, assessmentor reassessment (including any notice or announcement of intent to adopt or issue such decision, pronouncement, ruling,procedure, rule, notice, announcement, assessment or reassessment) (collectively, an “administrative action”); or (iii) anyamendment to, clarification of, or change in, the official position with respect to or the interpretation of anyadministrative action or any interpretation or pronouncement that provides for a position with respect to suchadministrative action that differs from the theretofore generally accepted position, in each of case (i), (ii) or (iii), by anylegislative body, court, governmental authority or agency, regulatory body or taxing authority, irrespective of the mannerin which such amendment, clarification, change, administrative action, interpretation or pronouncement is made known,which amendment, clarification, change or administrative action is effective or which interpretation, pronouncement or
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administrative action is announced on or after the date of issue of the Covered Bonds, there is more than an insubstantialrisk (assuming any proposed or announced amendment, clarification, change, interpretation, pronouncement oradministrative action is effective and applicable) the Issuer would be required to pay additional amounts as provided inCondition 8, and such circumstances are evidenced by the delivery by the Issuer to the Issuing and Paying Agent andBond Trustee of (x) a certificate signed by two senior officers of the Issuer stating that the said circumstances prevail anddescribing the facts leading thereto, and (y) an opinion of independent legal advisers of recognised standing to the effectthat the circumstances set forth in (i), (ii) or (iii) above prevail, the Issuer may, at its option and having given no less than30 nor more than 60 days’ notice (ending, in the case of Floating Rate Covered Bonds, on an Interest Payment Date) tothe Holders of the Covered Bonds in accordance with Condition 14 (which notice shall be irrevocable), redeem all (butnot some only) of the outstanding Covered Bonds at their Outstanding Principal Amount or, in the case of Zero CouponCovered Bonds, their Amortized Face Amount (as defined in Condition 6.10) or such Early Redemption Amount as maybe specified in, or determined in accordance with the provisions of, the Final Terms, together with accrued interest (ifany) thereon, provided, however, that no such notice of redemption may be given earlier than 90 days (or, in the case ofFloating Rate Covered Bonds a number of days which is equal to the aggregate of the number of days falling within thethen current Interest Period plus 60 days) prior to the earliest date on which the Issuer would be obliged to pay suchadditional amounts were a payment in respect of the Covered Bonds then due.
The Issuer may not exercise such option in respect of any Covered Bond which is the subject of the prior exercise by theHolder thereof of its option to require the redemption of such Covered Bond under Condition 6.06.
Call Option
6.03 If a Call Option is specified in the Final Terms as being applicable, then the Issuer may, having given theappropriate notice to the Holders in accordance with Condition 14, which Notice shall be irrevocable, and shall specifythe date fixed for redemption, redeem all or some only of the Covered Bonds of this Series outstanding on any OptionalRedemption Date at the Optional Redemption Amount(s) specified in, or determined in the manner specified in theapplicable Final Terms together with accrued interest (if any) thereon on the date specified in such notice.
The Issuer may not exercise such option in respect of any Covered Bond which is the subject of the prior exercise by theHolder thereof of its option to require the redemption of such Covered Bond under Condition 6.06.
6.04 The appropriate notice referred to in Condition 6.03 is a notice given by the Issuer to the Holders of the CoveredBonds of the relevant Series in accordance with Condition 14, which notice shall be irrevocable and shall specify:
the Series of Covered Bonds subject to redemption;
whether such Series is to be redeemed in whole or in part only and, if in part only, the aggregate principal amount ofand (except in the case of a Global Covered Bond) the serial numbers of the Covered Bonds of the relevant Serieswhich are to be redeemed;
the due date for such redemption, which shall be not less than thirty days nor more than 60 days after the date onwhich such notice is given and which shall be such date or the next of such dates (“Call Option Date(s)”) or a dayfalling within such period (“Call Option Period”), as may be specified in the Final Terms and which is, in the caseof Covered Bonds which bear interest at a floating rate, a date upon which interest is payable; and
the Optional Redemption Amount at which such Covered Bonds are to be redeemed.
Partial Redemption
6.05 If the Covered Bonds are to be redeemed in part only on any date in accordance with Condition 6.03:
such redemption must be for an amount not less than the Minimum Redemption Amount or not more than theMaximum Redemption Amount, in each case as may be specified in the applicable Final Terms;
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in the case of a partial redemption of Bearer Definitive Covered Bonds, the Covered Bonds to be redeemed shall bedrawn by lot in such European city as the Issuing and Paying Agent may specify, or identified in such other manneror in such other place as the Issuing and Paying Agent may approve and deem appropriate and fair;
in the case of a Global Covered Bond, the Covered Bonds to be redeemed shall be selected in accordance with thethen rules of Euroclear and/or Clearstream, Luxembourg and/or DTC and/or CDS and/or any other relevant clearingsystem (to be reflected in the records of Euroclear and/or Clearstream, Luxembourg and/or DTC and/or CDS orsuch other relevant clearing system as either a pool factor or a reduction in principal amount, at their discretion); and
in the case of Registered Definitive Covered Bonds, the Covered Bonds shall be redeemed (so far as may bepracticable) pro rata to their principal amounts, provided always that the amount redeemed in respect of eachCovered Bond shall be equal to a Specified Denomination,
subject always to compliance with all applicable laws and the requirements of any stock exchange on which the relevantCovered Bonds may be listed.
In the case of the redemption of part only of a Registered Definitive Covered Bond, a new Registered Definitive CoveredBond in respect of the unredeemed balance shall be issued in accordance with Conditions 2.04 to 2.08, which shall applyas in the case of a transfer of Registered Definitive Covered Bonds as if such new Registered Definitive Covered Bondwere in respect of the untransferred balance.
Put Option
6.06 If a Put Option is specified in the Final Terms as being applicable, upon the Holder of any Covered Bond of thisSeries giving the required notice to the Issuer specified in the applicable Final Terms (which notice shall be irrevocable),the Issuer will, upon expiry of such notice, redeem such Covered Bond subject to and in accordance with the termsspecified in the applicable Final Terms in whole (but not in part only) on the Optional Redemption Date and at theOptional Redemption Amount specified in, or determined in accordance with the provisions of, the applicable FinalTerms, together with accrued interest (if any) thereon. In order to exercise such option, the Holder must, not less than 45days before the Optional Redemption Date where the Covered Bond is a Covered Bond in definitive form held outsideEuroclear, Clearstream, Luxembourg, DTC and/or CDS deposit the relevant Covered Bond (together, in the case of aBearer Definitive Covered Bond that is not a Zero Coupon Covered Bond, with all unmatured Coupons appertainingthereto other than any Coupon maturing on or before the Optional Redemption Date (failing which the provisions ofCondition 9.06 apply)) during normal business hours at the specified office of, in the case of a Bearer Covered Bond, anyPaying Agent or, in the case of a Registered Covered Bond, the Registrar together with a duly completed earlyredemption notice (“Put Notice”) in the form which is available from the specified office of any of the Paying Agents or,as the case may be, the Registrar specifying, in the case of a Global Covered Bond, the aggregate principal amount inrespect of which such option is exercised (which must be a Specified Denomination specified in the Final Terms).Notwithstanding the foregoing, Covered Bonds represented by a Permanent Global Covered Bond or Global RegisteredCovered Bond shall be deemed to be deposited with the Paying Agent or the Registrar, as the case may be, for purposesof this Condition 6.06 at the time a Put Notice has been received by the Paying Agent or Registrar, as the case may be, inrespect of such Covered Bonds. No Covered Bond so deposited and option exercised may be withdrawn (except asprovided in the Agency Agreement).
In the case of the redemption of part only of a Registered Covered Bond, a new Registered Definitive Covered Bond inrespect of the unredeemed balance shall be issued in accordance with Conditions 2.04 to 2.08 which shall apply as in thecase of a transfer of Registered Definitive Covered Bonds as if such new Registered Definitive Covered Bond were inrespect of the untransferred balance.
The Holder of a Covered Bond may not exercise such Put Option (i) in respect of any Covered Bond which is the subjectof an exercise by the Issuer of its option to redeem such Covered Bond under either Condition 6.02 or 6.03, or(ii) following an Issuer Event of Default.
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Purchase of Covered Bonds
6.07 The Issuer or any of its subsidiaries may at any time, but will at no time be obligated to, purchase CoveredBonds in the open market or otherwise and at any price provided that all unmatured Receipts and Coupons appertainingthereto are purchased therewith. If purchases are made by tender, tenders must be available to all Holders of the relevantCovered Bonds alike.
Cancellation of Redeemed and Purchased Covered Bonds
6.08 All unmatured Covered Bonds and Coupons redeemed in accordance with this Condition 6 will be cancelledforthwith and may not be reissued or resold. All unmatured Covered Bonds and Coupons purchased in accordance withCondition 6.07 may be cancelled or may be reissued or resold.
Further Provisions applicable to Redemption Amount and Instalment Amount
6.09 The provisions of Condition 5.07 and the last paragraph of Condition 5.08 shall apply to any determination orcalculation of the Redemption Amount or any Instalment Amount required by the Final Terms to be made by theCalculation Agent (as defined in Condition 5.09).
References herein to “Redemption Amount” shall mean, as appropriate, the Final Redemption Amount, final InstalmentAmount, the Optional Redemption Amount, the Early Redemption Amount or such other amount in the nature of aredemption amount as may be specified in, or determined in accordance with, the provisions of the applicable FinalTerms.
6.10 In the case of any Zero Coupon Covered Bond, the “Amortized Face Amount” shall be an amount equal to thesum of:
(a) the Issue Price specified in the Final Terms; and
(b) the product of the Amortization Yield (compounded annually) being applied to the Issue Price from(and including) the Issue Date specified in the Final Terms to (but excluding) the date fixed forredemption or (as the case may be) the date upon which such Covered Bond becomes due andrepayable.
Where such calculation is to be made for a period which is not a whole number of years, the calculation in respect of theperiod of less than a full year shall be made on the basis of the Day Count Fraction (as defined in Condition 5.09)specified in the Final Terms.
6.11 If any Redemption Amount (other than the Final Redemption Amount) is improperly withheld or refused ordefault is otherwise made in the payment thereof, the Amortized Face Amount shall be calculated as provided inCondition 6.10 but as if references in subparagraph (b) to the date fixed for redemption or the date upon which such ZeroCoupon Covered Bond becomes due and repayable were replaced by references to the earlier of:
(a) the date on which, upon due presentation or surrender of the relevant Covered Bond (if required), therelevant payment is made; and
(b) (except where presentation or surrender of the relevant Covered Bond is not required as a preconditionof payment), the seventh day after the date on which, the Issuing and Paying Agent or, as the case maybe, the Registrar having received the funds required to make such payment, notice is given to theHolders of the Covered Bonds in accordance with Condition 14 of that circumstance (except to theextent that there is a failure in the subsequent payment thereof to the relevant Holder).
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Instalment Covered Bonds
6.12 Any Instalment Covered Bond will be redeemed in the Instalment Amounts and on the Instalment Datesspecified in the applicable Final Terms.
Redemption due to Illegality
6.13 The Covered Bonds of all Series may be redeemed at the option of the Issuer in whole, but not in part, at anytime, on giving not less than 30 nor more than 60 days’ notice to the Bond Trustee, the Issuing and Paying Agent, theRegistrar and, in accordance with Condition 14, all holders of the Covered Bonds (which notice shall be irrevocable), ifthe Issuer satisfies the Bond Trustee immediately before the giving of such notice that it has, or will, before the nextInterest Payment Date of any Covered Bond of any Series, become unlawful for the Issuer to make, fund or allow toremain outstanding any advance made by it to the Guarantor pursuant to the Intercompany Loan Agreement, as a resultof any change in, or amendment to, the applicable laws or regulations or any change in the application or officialinterpretation of such laws or regulations, which change or amendment has become or will become effective before thenext such Interest Payment Date.
Covered Bonds redeemed pursuant to this Condition 6.13 will be redeemed at their Early Redemption Amount together(if appropriate) with interest accrued to (but excluding) the date of redemption.
Prior to the publication of any notice of redemption pursuant to this Condition 6.13, the Issuer shall deliver to the Issuingand Paying Agent and Bond Trustee a certificate signed by two senior officers of the Issuer stating that the Issuer isentitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the rightof the Issuer so to redeem have occurred and the Issuing and Paying Agent and Bond Trustee shall be entitled to acceptthe certificate as sufficient evidence of the satisfaction of the conditions precedent set out above, in which event it shallbe conclusive and binding on all holders of the Covered Bonds, Receiptholders and Couponholders.
7. Events of Default
Issuer Events of Default
7.01 The Bond Trustee at its discretion may, and if so requested in writing by the holders of at least 25 per cent. ofthe aggregate Principal Amount Outstanding of the Covered Bonds (which for this purpose or the purpose of anyExtraordinary Resolution (as defined in the Trust Deed) referred to in this Condition 7.01 means the Covered Bonds ofthis Series together with the Covered Bonds of any other Series constituted by the Trust Deed) then outstanding as if theywere a single Series (with the nominal amount of Covered Bonds not denominated in USD converted into USD at theapplicable Covered Bond Swap Rate) or if so directed by an Extraordinary Resolution of all the holders of the CoveredBonds shall, (but in the case of the happening of any of the events mentioned in sub-paragraphs (b) to (f) below, only ifthe Bond Trustee shall have certified in writing to the Issuer and the Guarantor, that such event is, in its opinion,materially prejudicial to the interests of the holders of the Covered Bonds of any Series) (subject in each case to beingindemnified and/or secured to its satisfaction), give notice (an “Issuer Acceleration Notice”) in writing to the Issuer thatas against the Issuer (but, for the avoidance of doubt, not against the Guarantor under the Covered Bond Guarantee) eachCovered Bond of each Series is, and each such Covered Bond shall thereupon immediately become, due and repayable atits Early Redemption Amount together with accrued interest as provided in the Trust Deed if any of the following events(each, an “Issuer Event of Default”) shall occur and be continuing:
(a) the Issuer fails to pay any principal or interest in respect of the Covered Bonds within 10 BusinessDays in the case of principal and 30 days in the case of interest, in each case of the respective duedate; or
(b) the Issuer fails to perform or observe any obligations under the Covered Bonds, Receipts or Couponsof any Series, the Trust Deed or any other Transaction Document (other than the DealershipAgreement and any subscription agreement for the Covered Bonds) to which the Issuer is a party(other than any obligation of the Issuer to comply with the Asset Coverage Test and any otherobligation of the Issuer specifically provided for in this Condition 7.01) and such failure continues for
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a period of 30 days (or such longer period as the Bond Trustee may permit) next following the serviceby the Bond Trustee on the Issuer of notice requiring the same to be remedied (except incircumstances where the Bond Trustee considers such failure to be incapable of remedy in which caseno period of continuation will apply and no notice by the Bond Trustee will be required); or
(c) an Insolvency Event in respect of the Issuer; or
(d) an Asset Coverage Test Breach Notice has been served and not revoked (in accordance with the termsof the Transaction Documents) on or before the Guarantor Payment Date immediately following thenext Calculation Date after service of such Asset Coverage Test Breach Notice; or
(e) if the Pre-Maturity Test in respect of any Series of Hard Bullet Covered Bonds is breached less thansix months prior to the Final Maturity Date of that Series of Hard Bullet Covered Bonds, and theGuarantor has not cured the breach before the earlier to occur of: (i) ten Canadian Business Days fromthe date that the Seller is notified of the breach of the Pre-Maturity Test and (ii) the Final MaturityDate of that Series of Hard Bullet Covered Bonds; or
(f) if a ratings trigger prescribed by the Conditions or the Transaction Documents (and not otherwisespecifically provided for in this Condition 7.01) is breached and the prescribed remedial action is nottaken within the specified time period, unless, in respect of any ratings trigger other than the AccountBank Threshold Ratings, the Standby Account Bank Threshold Ratings, the Cash ManagementDeposit Ratings and the Servicer Deposit Threshold Ratings, such breach occurs at a time that theGuarantor is Independently Controlled and Governed.
For the purposes of these Terms and Conditions “Calculation Date” means the last Canadian Business Day of eachmonth.
Upon the Covered Bonds becoming immediately due and repayable against the Issuer pursuant to this Condition 7.01,the Bond Trustee shall forthwith serve a notice to pay (the “Notice to Pay”) on the Guarantor pursuant to the CoveredBond Guarantee and the Guarantor shall be required to make payments of Guaranteed Amounts when the same shallbecome Due for Payment in accordance with the terms of the Covered Bond Guarantee.
Following the occurrence of an Issuer Event of Default and service of an Issuer Acceleration Notice, the Bond Trusteemay or shall take such proceedings against the Issuer in accordance with the first paragraph of Condition 7.03.
The Trust Deed provides that all moneys (the “Excess Proceeds”) received by the Bond Trustee from the Issuer or anyreceiver, liquidator, administrator or other similar official appointed in relation to the Issuer following the occurrence ofan Issuer Event of Default and service of an Issuer Acceleration Notice, shall be paid by the Bond Trustee, as soon aspracticable after receipt thereof by the Bond Trustee, on behalf of the holders of the Covered Bonds of the relevant Seriesto the Guarantor (or the Cash Manager on its behalf) for the account of the Guarantor and shall be held in the GuarantorAccounts and the Excess Proceeds shall thereafter form part of the Security granted pursuant to the Security Agreementand shall be used by the Guarantor (or the Cash Manager on its behalf) in the same manner as all other moneys from timeto time held by the Cash Manager and/or standing to the credit of the Guarantor in the Guarantor Accounts. Any ExcessProceeds received by the Bond Trustee shall discharge pro tanto the obligations of the Issuer in respect of the payment ofthe amount of such Excess Proceeds under the Covered Bonds, Receipts and Coupons. However, the obligations of theGuarantor under the Covered Bond Guarantee are, following a Covered Bond Guarantee Activation Event, unconditionaland irrevocable and the receipt by the Bond Trustee of any Excess Proceeds shall not reduce or discharge any of suchobligations.
By subscribing for Covered Bonds, each holder of the Covered Bonds shall be deemed to have irrevocably directed theBond Trustee to pay the Excess Proceeds to the Guarantor in the manner as described above.
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Guarantor Events of Default
7.02 The Bond Trustee at its discretion may, and if so requested in writing by the holders of at least 25 per cent. ofthe aggregate Principal Amount Outstanding of the Covered Bonds (which for this purpose and the purpose of anyExtraordinary Resolution referred to in this Condition 7.02 means the Covered Bonds of this Series together with theCovered Bonds of any other Series constituted by the Trust Deed) then outstanding as if they were a single Series (withthe nominal amount of Covered Bonds not denominated in USD converted into USD at the applicable Covered BondSwap Rate) or if so directed by an Extraordinary Resolution of all the holders of the Covered Bonds shall (but in the caseof the happening of any of the events described in paragraphs (b) to (f) below, only if the Bond Trustee shall havecertified in writing to the Issuer and the Guarantor that such event is, in its opinion, materially prejudicial to the interestsof the holders of the Covered Bonds of any Series) (subject in each case to being indemnified and/or secured to itssatisfaction) give notice (the “Guarantor Acceleration Notice”) in writing to the Issuer and the Guarantor, that (x) eachCovered Bond of each Series is, and each Covered Bond of each Series shall as against the Issuer (if not already due andrepayable against it following an Issuer Event of Default), thereupon immediately become, due and repayable at its EarlyRedemption Amount together with accrued interest and (y) all amounts payable by the Guarantor under the CoveredBond Guarantee shall thereupon immediately become due and payable at the Guaranteed Amount corresponding to theEarly Redemption Amount for each Covered Bond of each Series together with accrued interest, in each case as providedin the Trust Deed and thereafter the Security shall become enforceable if any of the following events (each, a“Guarantor Event of Default”) shall occur and be continuing:
(a) default is made by the Guarantor for a period of seven days or more in the payment of any GuaranteedAmounts when Due for Payment in respect of the Covered Bonds of any Series, except in the case ofthe payment of a Guaranteed Amount when Due for Payment under Condition 6.01 where theGuarantor shall be required to make payments of Guaranteed Amounts which are Due for Payment onthe dates specified therein; or
(b) if default is made by the Guarantor in the performance or observance of any obligation, condition orprovision binding on it (other than any obligation for the payment of Guaranteed Amounts in respectof the Covered Bonds of any Series and any other obligation specifically provided for in thisCondition 7.02) under the Trust Deed, the Security Agreement or any other Transaction Document(other than the obligation of the Guarantor to (i) repay the Demand Loan pursuant to the terms of theIntercompany Loan Agreement, or (ii) make a payment under a Swap Agreement if it has insufficientfunds therefor) to which the Guarantor is a party and, except where such default is or the effects ofsuch default are, in the opinion of the Bond Trustee, not capable of remedy when no such continuationand notice as is hereinafter mentioned will be required, such default continues for 30 days (or suchlonger period as the Bond Trustee may permit) after written notice thereof has been given by the BondTrustee to the Guarantor requiring the same to be remedied; or
(c) an Insolvency Event in respect of the Guarantor; or
(d) a failure to satisfy the Amortization Test on any Calculation Date following the occurrence and duringthe continuance of an Issuer Event of Default; or
(e) the Covered Bond Guarantee is not, or is claimed by the Guarantor not to be, in full force and effect;or
(f) if a ratings trigger prescribed by the Conditions or the Transaction Documents (and not otherwisespecifically provided for in this Condition 7.02) is breached and the prescribed remedial action is nottaken within the specified time period, unless, in respect of any ratings trigger other than the AccountBank Threshold Ratings, the Standby Account Bank Threshold Ratings, the Cash ManagementDeposit Ratings and the Servicer Deposit Threshold Ratings, such breach occurs at a time that theGuarantor is Independently Controlled and Governed.
Following the occurrence of a Guarantor Event of Default and service of a Guarantor Acceleration Notice on theGuarantor, the Bond Trustee may or shall take such proceedings or steps in accordance with the first and secondparagraphs, respectively, of Condition 7.03 and the holders of the Covered Bonds shall have a claim against the
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Guarantor, under the Covered Bond Guarantee, for an amount equal to the Early Redemption Amount together withaccrued but unpaid interest and any other amount due under the Covered Bonds (other than additional amounts payableunder Condition 8) as provided in the Trust Deed in respect of each Covered Bond.
Enforcement
7.03 The Bond Trustee may at any time, at its discretion and without further notice, take such proceedings againstthe Issuer and/or the Guarantor, as the case may be, and/or any other person as it may think fit to enforce the provisionsof the Trust Deed, the Covered Bonds, the Receipts, the Coupons and any other Transaction Document, but it shall notbe bound to take any such enforcement proceedings in relation to the Trust Deed, the Covered Bonds, the Receipts or theCoupons or any other Transaction Document unless (i) it shall have been so directed by an Extraordinary Resolution ofall the holders of the Covered Bonds of all Series (with the Covered Bonds of all Series taken together as a single Seriesas described above) or so requested in writing by the holders of not less than 25 per cent. of the aggregate PrincipalAmount Outstanding of the Covered Bonds of all Series then outstanding (taken together and converted into USD at theapplicable Covered Bond Swap Rate) and (ii) it shall have been indemnified and/or secured to its satisfaction.
The Bond Trustee may at any time, at its discretion and without further notice, take such proceedings against theGuarantor and/or any other person as it may think fit to enforce the provisions of the Security Agreement and may, atany time after the Security has become enforceable, take such steps as it may think fit to enforce the Security, but it shallnot be bound to take any such steps unless (i) it shall have been so directed by an Extraordinary Resolution of all theholders of the Covered Bonds of all Series (with the Covered Bonds of all Series taken together as a single Series asdescribed above) or a request in writing by the holders of not less than 25 per cent. of the aggregate Principal AmountOutstanding of the Covered Bonds of all Series then outstanding (taken together and converted into USD at theapplicable Covered Bond Swap Rate); and (ii) it shall have been indemnified and/or secured to its satisfaction.
In exercising any of its powers, trusts, authorities and discretions the Bond Trustee shall, subject to applicable law, onlyhave regard to the interests of the holders of the Covered Bonds of all Series and shall not have regard to the interests ofany other Secured Creditors.
No holder of the Covered Bonds, Receiptholder or Couponholder shall be entitled to proceed directly against the Issueror the Guarantor or to take any action with respect to the Trust Deed, the Covered Bonds, the Receipts, the Coupons, orthe Security unless the Bond Trustee, having become bound so to proceed, fails so to do within a reasonable time andsuch failure shall be continuing.
8. Taxation
8.01 All amounts payable (whether in respect of principal, interest or otherwise) in respect of the Covered Bonds,Receipts and Coupons will be paid free and clear of and without withholding or deduction for or on account of anypresent or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or onbehalf of Canada, any province or territory or political subdivision thereof or any authority or agency therein or thereofhaving power to tax or, in the case of Covered Bonds, Receipts or Coupons issued by a branch of the Issuer locatedoutside Canada, the country in which such branch is located or any political subdivision thereof or any authority oragency therein or thereof having power to tax, unless the withholding or deduction of such taxes, duties, assessments orgovernmental charges is required by law or the interpretation or administration thereof. In that event, the Issuer will paysuch additional amounts as may be necessary in order that the net amounts received by the Holder after such withholdingor deduction shall equal the respective amounts of principal and interest which would have been received in respect ofthe Covered Bonds, Receipts or Coupons (as the case may be), in the absence of such withholding or deduction; exceptthat no additional amounts shall be payable with respect to any payment in respect of any Covered Bond, Receipt orCoupon:
(a) to, or to a third party on behalf of, a Holder who is liable for such taxes, duties, assessments orgovernmental charges in respect of such Covered Bond, Receipt or Coupon by reason of his havingsome connection with Canada or the country in which such branch is located (for these purposes“connection” includes but is not limited to any present or former connection between such holder (orbetween a fiduciary, seller, beneficiary, member or shareholder of, or possessor of power over suchholder if such holder is an estate, trust, partnership, limited liability company or corporation) and such
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jurisdiction) otherwise than the mere holding of (but not the enforcement of) such Covered Bond,Receipt or Coupon; or
(b) to, or to a third party on behalf of, a Holder in respect of whom such tax, duty, assessment orgovernmental charge is required to be withheld or deducted by reason of the Holder or other personentitled to payments under the Covered Bonds being a person with whom the Issuer is not dealing atarm’s length (within the meaning of the Income Tax Act (Canada)); or
(c) where such withholding or deduction is imposed on a payment to an individual and is required to bemade pursuant to European Council Directive 2003/48/EC or any other Directive implementing theconclusions of the ECOFIN council meeting of 26-27 November 2000 on the taxation of savingsincome or any law implementing or complying with, or introduced in order to conform to, suchDirectives; or
(d) presented for payment by or on behalf of a Holder who would be able to avoid such withholding ordeduction by presenting the relevant Covered Bond, Receipt or Coupon to another Paying Agent in amember state of the European Union; or
(e) presented for payment more than 30 days after the Relevant Date except to the extent that the Holderthereof would have been entitled to such additional amount on presenting the same for payment on thethirtieth such day; or
(f) to, or to a third party on behalf of, a Holder who is liable for such taxes, duties, assessments or othergovernmental charges by reason of such Holder’s failure to comply with any certification,identification, documentation or other reporting requirement concerning the nationality, residence,identity or connection with Canada or the country in which such branch is located of such Holder, if(i) compliance is required by law as a precondition to, exemption from, or reduction in the rate of, thetax, assessment or other governmental charge and (ii) the Issuer has given Holders at least 30 days’notice that Holders will be required to provide such certification, identification, documentation orother requirement; or
(g) in respect of any estate, inheritance, gift, sales, transfer, personal property or any similar tax, duty,assessment or governmental charge; or
(h) where any combination of items (a) - (g) applies;
nor will such additional amounts be payable with respect to any payment in respect of the Covered Bonds, Receipts andCoupons to a holder that is a fiduciary or partnership to the extent that the beneficiary or seller with respect to suchfiduciary, or member of such partnership would not have been entitled to receive a payment of such additional amountshad such beneficiary, seller or member received directly its beneficial or distributive share of such payment.
For the purposes of this Condition 8.01, the term “Holder” shall be deemed to refer to the beneficial holder for the timebeing of the Covered Bonds.
8.02 For the purposes of these Terms and Conditions, the “Relevant Date” means, in respect of any Covered Bond,Receipt or Coupon, the date on which payment thereof first become due and payable, or, if the full amount of the moneyspayable has not been received by the Issuing and Paying Agent, or as the case may be, the Registrar on or prior to suchdue date, the date on which, the full amount of such moneys shall have been so received and notice to that effect shallhave been duly given to the Holders in accordance with Condition 14.
8.03 If the Issuer and/or the Guarantor become subject generally at any time to any taxing jurisdiction other than orin addition to Canada or the country in which the relevant branch of the Issuer is located, references in Condition 6.02,Condition 8.01 and Condition 8.05, as applicable, to Canada or the country in which the relevant branch is located shallbe read and construed as references to Canada or the country in which such branch is located and/or to such otherjurisdiction(s).
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8.04 Any reference in these Terms and Conditions to any payment due in respect of the Covered Bonds, Receipts orCoupons shall be deemed to include any additional amounts which may be payable under this Condition 8. Unless thecontext otherwise requires, any reference in these Terms and Conditions to “principal” shall include any premiumpayable in respect of a Covered Bond, any Instalment Amount or Final Redemption Amount, any Excess Proceeds whichmay be payable by the Bond Trustee under or in respect of the Covered Bonds and any other amounts in the nature ofprincipal payable pursuant to these Terms and Conditions and “interest” shall include all amounts payable pursuant toCondition 5 and any other amounts in the nature of interest payable pursuant to these Terms and Conditions.
8.05 Should any payments made by the Guarantor under the Covered Bond Guarantee be made subject to anywithholding or deduction for or on account of taxes or duties of whatever nature imposed or levied by or on account ofCanada, any province or territory, political subdivision thereof or by any authority or agency therein or thereof havingpower to tax, or, in the case of payments made by the Guarantor under the Covered Bond Guarantee in respect ofCovered Bonds, Receipts or Coupons issued by a branch of the Issuer located outside of Canada, the country in whichsuch branch is located or any political subdivision thereof or by any authority or agency therein or thereof having thepower to tax, the Guarantor will not be obliged to pay any additional amounts as a consequence.
9. Payments
Payments—Bearer Covered Bonds
9.01 Conditions 9.02 to 9.07 are applicable in relation to Bearer Covered Bonds.
9.02 Payment of amounts (other than interest) due in respect of Bearer Covered Bonds will be made againstpresentation and (save in the case of partial payment or payment of an Instalment Amount other than the final InstalmentAmount) surrender of the relevant Bearer Covered Bonds at the specified office of any of the Paying Agents.
Payment of Instalment Amounts (other than the final Instalment Amount) in respect of an Instalment Covered Bondwhich is a Bearer Definitive Covered Bond with Receipts will be made against presentation of the Covered Bondtogether with the relevant Receipt and surrender of such Receipt.
The Receipts are not and shall not in any circumstances be deemed to be documents of title and if separated from theCovered Bond to which they relate will not represent any obligation of the Issuer. Accordingly, the presentation of aCovered Bond without the relevant Receipt or the presentation of a Receipt without the Covered Bond to which itappertains shall not entitle the Holder to any payment in respect of the relevant Instalment Amount.
9.03 Payment of amounts in respect of interest on Bearer Covered Bonds will be made:
(a) in the case of a Temporary Global Covered Bond or Permanent Global Covered Bond, againstpresentation of the relevant Temporary Global Covered Bond or Permanent Global Covered Bond atthe specified office of any of the Paying Agents outside (unless Condition 9.04 applies) the UnitedStates and, in the case of a Temporary Global Covered Bond, upon due certification as requiredtherein;
(b) in the case of Bearer Definitive Covered Bonds without Coupons attached thereto at the time of theirinitial delivery, against presentation of the relevant Bearer Definitive Covered Bonds at the specifiedoffice of any of the Paying Agents outside (unless Condition 9.04 applies) the United States; and
(c) in the case of Bearer Definitive Covered Bonds delivered with Coupons attached thereto at the time oftheir initial delivery, against surrender of the relevant Coupons or, in the case of interest due otherwisethan on an Interest Payment Date, against presentation of the relevant Bearer Definitive CoveredBonds, in either case at the specified office of any of the Paying Agents outside (unless Condition 9.04applies) the United States.
9.04 Notwithstanding the foregoing (and in relation to payments in U.S. dollars only), payments of amounts due inrespect of interest on the Bearer Covered Bonds and exchanges of Talons for Coupon sheets in accordance with
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Condition 9.07 will not be made at the specified office of any Paying Agent in the United States (as defined in the UnitedStates Internal Revenue Code and Regulations thereunder) unless (i) payment in full of amounts due in respect of intereston such Covered Bonds when due or, as the case may be, the exchange of Talons at all the specified offices of the PayingAgents outside the United States is illegal or effectively precluded by exchange controls or other similar restrictions and(ii) such payment or exchange is permitted by applicable United States law. If clauses (i) and (ii) of the previous sentenceapply, the Issuer shall forthwith appoint a further Paying Agent with a specified office in New York City.
9.05 If the due date for payment of any amount due in respect of any Bearer Covered Bond is not a Payment Day (asdefined in Condition 9.12), then the Holder thereof will not be entitled to payment thereof until the next day which issuch a day, and from such day and thereafter will be entitled to receive payment by cheque on any local banking day, andwill be entitled to payment by transfer to a designated account on any day which is a local banking day, a Payment Dayand a day on which commercial banks and foreign exchange markets settle payments in the relevant currency in the placewhere the relevant designated account is located and no further payment on account of interest or otherwise shall be duein respect of such postponed payment unless there is a subsequent failure to pay in accordance with these Terms andConditions in which event interest shall continue to accrue as provided in Condition 5.06 or, if appropriate, Condition5.10.
9.06 Each Bearer Definitive Covered Bond initially delivered with Coupons, Talons or Receipts attached theretoshould be presented and, save in the case of partial payment of the Redemption Amount, surrendered for finalredemption together with all unmatured Receipts, Coupons and Talons relating thereto, failing which:
(a) the amount of any missing unmatured Coupons (or, in the case of a payment not being made in full,that portion of the amount of such missing Coupon which the Redemption Amount paid bears to theRedemption Amount due) relating to Bearer Definitive Covered Bonds that are Fixed Rate CoveredBonds or bear interest in fixed amounts will be deducted from the amount otherwise payable on suchfinal redemption, the amount so deducted being payable against surrender of the relevant Coupon atthe specified office of any of the Paying Agents at any time within two years of the Relevant Dateapplicable to payment of such Redemption Amount (whether or not the Issuer’s obligation to makepayment in respect of such Coupon would otherwise have ceased under Condition 10);
(b) all unmatured Coupons relating to such Bearer Definitive Covered Bonds that are Floating RateCovered Bonds or that bear interest in variable amounts (whether or not such Coupons are surrenderedtherewith) shall become void and no payment shall be made thereafter in respect of them;
(c) in the case of Bearer Definitive Covered Bonds initially delivered with Talons attached thereto, allunmatured Talons (whether or not surrendered therewith) shall become void and no exchange forCoupons shall be made thereafter in respect of them; and
(d) in the case of Bearer Definitive Covered Bonds initially delivered with Receipts attached thereto, allReceipts relating to such Covered Bonds in respect of a payment of an Instalment Amount which (butfor such redemption) would have fallen due on a date after such due date for redemption (whether ornot surrendered therewith) shall become void and no payment shall be made thereafter in respect ofthem.
The provisions of paragraph (a) of this Condition 9.06 notwithstanding, if any Bearer Definitive Covered Bonds shouldbe issued with a Maturity Date and Rate or Rates of Interest such that, on the presentation for payment of any suchBearer Definitive Covered Bond without any unmatured Coupons attached thereto or surrendered therewith, the amountrequired by paragraph (a) to be deducted would be greater than the Redemption Amount otherwise due for payment,then, upon the due date for redemption of any such Bearer Definitive Covered Bond, such unmatured Coupons (whetheror not attached) shall become void (and no payment shall be made in respect thereof) as shall be required so that, uponapplication of the provisions of paragraph (a) in respect of such Coupons as have not so become void, the amountrequired by paragraph (a) to be deducted would not be greater than the Redemption Amount otherwise due for payment.
Where the application of the foregoing sentence requires some but not all of the unmatured Coupons relating to a BearerDefinitive Covered Bond to become void, the relevant Paying Agent shall determine which unmatured Coupons are to
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become void, and shall select for such purpose Coupons maturing on later dates in preference to Coupons maturing onearlier dates.
9.07 In relation to Bearer Definitive Covered Bonds initially delivered with Talons attached thereto, on or after theInterest Payment Date of the final Coupon comprised in any Coupon sheet, the Talon comprised in the Coupon sheetmay be surrendered at the specified office of any Paying Agent outside (unless Condition 9.04 applies) the United Statesin exchange for a further Coupon sheet (including any appropriate further Talon), subject to the provisions of Condition10 below. Each Talon shall, for the purpose of these Terms and Conditions, be deemed to mature on the Interest PaymentDate on which the final Coupon comprised in the relevant Coupon sheet matures.
Payments—Registered Covered Bonds
9.08 Condition 9.09 is applicable in relation to Registered Covered Bonds.
9.09 Payments of principal (other than instalments of principal prior to the final instalment) in respect of eachRegistered Covered Bond (whether or not in global form) will be made against presentation and surrender (or, in the caseof part payment of any sum due, endorsement) of the Registered Covered Bond at the specified office of the Registrar orany of the Paying Agents. Such payments will be made by electronic transfer to the Designated Account (as definedbelow) of the holder (or the first named of joint holders) of the Registered Covered Bond appearing in the register (the“Register”) of holders of the Registered Covered Bonds maintained by the Registrar at the close of business on the thirdBusiness Day (being for this purpose a day on which banks are open for business in the city where the specified office ofthe Registrar is located) before the relevant due date. Notwithstanding the previous sentence, if (i) a holder does not havea “Designated Account” or (ii) the principal amount of the Covered Bonds held by a holder is less than U.S.$250,000(or its approximate equivalent in any other Specified Currency), payment will instead be made by a cheque in theSpecified Currency drawn on a Designated Bank (as defined below). For these purposes, “Designated Account” meansthe account (which, in the case of a payment in Japanese Yen to a non-resident of Japan, shall be a non-resident account)maintained by a holder with a “Designated Bank” and identified as such in the Register and Designated Bank means (inthe case of payment in a Specified Currency other than euro) a bank in the principal financial centre of the country ofsuch Specified Currency (which, if the Specified Currency is Australian dollars or New Zealand dollars, shall be Sydneyand Auckland, respectively) and (in the case of a payment in euro) any bank which processes payments in euro.
Payments of interest and payments of instalments of principal (other than the final instalment) in respect of eachRegistered Covered Bond (whether or not in global form) will be made by a cheque in the Specified Currency drawn ona Designated Bank and mailed by uninsured mail on the Business Day in the city where the specified office of theRegistrar is located on the relevant due date to the holder (or the first named of joint holders) of the Registered CoveredBond appearing in the Register at the close of business on (i) the first Clearing System Business Day (in relation toGlobal Covered Bonds), where “Clearing System Business Day” means (x) Monday to Friday inclusive except 25December and 1 January in the case of Global Covered Bonds held in Euroclear and/or Clearstream, Luxembourg and(y) “Business Day” as defined in Condition 5.09 in the case of Global Covered Bonds held in any other Clearing System;and (ii) the fifteenth day (in relation to Registered Definitive Covered Bonds), whether or not such fifteenth day is aBusiness Day, before the relevant due date (the “Record Date”) at the holder’s address shown in the Register on theRecord Date and at the holder’s risk. Upon application of the holder to the specified office of the Registrar not less thanthree Business Days in the city where the specified office of the Registrar is located before the due date for any paymentof interest in respect of a Registered Covered Bond, the payment may be made by electronic transfer on the due date inthe manner provided in the preceding paragraph. Any such application for electronic transfer shall be deemed to relate toall future payments of interest (other than interest due on redemption) and instalments of principal (other than the finalinstalment) in respect of the Registered Covered Bonds which become payable to the holder who has made the initialapplication until such time as the Registrar is notified in writing to the contrary by such holder. Payment of the interestdue in respect of each Registered Covered Bond on redemption and the final instalment of principal will be made in thesame manner as payment of the principal in respect of such Registered Covered Bond.
Holders of Registered Covered Bonds will not be entitled to any interest or other payment for any delay in receiving anyamount due in respect of any Registered Covered Bond as a result of a cheque posted in accordance with this Conditionarriving after the due date for payment or being lost in the post. No commissions or expenses shall be charged to suchholders by the Registrar in respect of any payments of principal or interest in respect of the Registered Covered Bonds.
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All amounts payable to DTC or its nominee as registered holder of a Registered Global Covered Bond in respect ofCovered Bonds denominated in a Specified Currency other than U.S. dollars shall be paid by electronic transfer by theRegistrar to an account in the relevant Specified Currency of the Exchange Agent on behalf of DTC or its nominee forconversion into and payment in U.S. dollars in accordance with the provisions of the Agency Agreement.
None of the Issuer, the Guarantor, the Bond Trustee or the Agents will have any responsibility or liability for any aspectof the records relating to, or payments made on account of, beneficial ownership interests in the Registered GlobalCovered Bonds or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
Payments – General Provisions
9.10 Save as otherwise specified in these Terms and Conditions, Conditions 9.11 to 9.13 are applicable in relation toBearer Covered Bonds and Registered Covered Bonds.
9.11 Payments of amounts due (whether principal, interest or otherwise) in respect of Covered Bonds will be made inthe currency in which such amount is due (a) by cheque or (b) at the option of the payee, by transfer to an accountdenominated in the relevant currency (or in the case of USD, an account to which USD may be credited or transferred)specified by the payee. In the case of Bearer Covered Bonds, if payments are made by transfer, such payments will onlybe made by transfer to an account maintained by the payee outside of the United States. In no event will payment ofamounts due in respect of Bearer Covered Bonds be made by a cheque mailed to an address in the United States.Payments will, without prejudice to the provisions of Condition 8, be subject in all cases to (i) any applicable fiscal orother laws and regulations and (ii) any withholding or deduction required pursuant to an agreement described in section1471(b) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) or otherwise imposed pursuant to sections1471 through 1474 of the Code, any regulations or agreements thereunder, any official interpretations thereof or (withoutprejudice to the provisions of Condition 8), any law implementing an intergovernmental approach thereto.
9.12 For the purposes of these Terms and Conditions:
(a) “local banking day” means a day (other than a Saturday or Sunday) on which commercial banks areopen for general business (including dealings in foreign exchange and foreign currency deposits) inthe place of presentation of the relevant Covered Bond or, as the case may be, Coupon; and
(b) “Payment Day” means (a) in the case of any currency other than euro, a day on which commercialbanks are open for general business (including dealings in foreign exchange and foreign currencydeposits) and foreign exchange markets settle payments in the Financial Centre(s) specified in theFinal Terms and on which commercial banks and foreign exchange markets settle payments in theprincipal financial centre of the country of the relevant Specified Currency or (b) in the case ofpayment in euro, a day which is a TARGET2 Business Day and on which commercial banks andforeign exchange markets are open for general business (including dealings in foreign exchange andforeign currency deposits) in the Financial Centre(s) specified in the Final Terms.
9.13 No commissions or expenses shall be charged to the Holders of Covered Bonds or Coupons in respect of suchpayments.
10. Prescription
10.01 Subject to applicable law, the Issuer’s obligation to pay an amount of principal and interest in respect ofCovered Bonds will cease if the Covered Bonds or Coupons, as the case may be, are not presented within two years afterthe Relevant Date (as defined in Condition 8.02) for payment thereof.
10.02 In relation to Bearer Definitive Covered Bonds initially delivered with Talons attached thereto, there shall notbe included in any Coupon sheet issued upon exchange of a Talon any Coupon which would be void pursuant toCondition 9.06 or this Condition 10 or the maturity date or due date for the payment of which would fall after the duedate for the redemption of the relevant Covered Bond, or any Talon the maturity date of which would fall after the duedate for the redemption of the relevant Covered Bond.
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11. The Paying Agents, the Registrar, Transfer Agents, the Calculation Agent and the Exchange Agent
11.01 The initial Paying Agents, the Registrar, the Transfer Agents and the Exchange Agent and their respectiveinitial specified offices are specified herein. The Issuer and the Guarantor each reserves the right, without approval of theBond Trustee, at any time to vary or terminate the appointment of any Paying Agent (including the Issuing and PayingAgent), any Transfer Agent(s), the Registrar, the Exchange Agent or the Calculation Agent and to appoint additional orother Paying Agents, Transfer Agents or another Registrar, Exchange Agent or Calculation Agent provided that theIssuer and the Guarantor will at all times maintain (i) an Issuing and Paying Agent, (ii) in the case of Registered CoveredBonds, a Registrar, (iii) a Paying Agent (which may be the Issuing and Paying Agent) with a specified office in acontinental European city, (iv) a Paying Agent in a member state of the European Union that is not obliged to withholdor deduct tax pursuant to European Council Directive 2003/48/EC or any other Directive implementing the conclusionsof the ECOFIN council meeting of 26-27 November 2000 on the taxation of savings income or any law implementing orcomplying with, or introduced in order to conform to, such Directives, (v) so long as the Covered Bonds are admitted tothe Official List and to trading on the London Stock Exchange and/or admitted to listing or trading on any other stockexchange or relevant authority, a Paying Agent (in the case of Bearer Covered Bonds) and a Transfer Agent (in the caseof Registered Covered Bonds), which may in either case be the Issuing and Paying Agent, each with a specified office inLondon and/or in such other place as may be required by the rules of such other stock exchange or other relevantauthority, (vi) in the circumstances described in Condition 9.04, a Paying Agent with a specified office in New YorkCity, (vii) a Calculation Agent where required by the Terms and Conditions applicable to any Covered Bonds, and (viii)so long as any of the Registered Global Covered Bonds payable in a Specified Currency other than U.S. dollars are heldthrough DTC or its nominee, there will at all times be an Exchange Agent with a specified office in the United States (inthe case of (i), (ii), (iii) and (vii) with a specified office located in such place (if any) as may be required by the Termsand Conditions). The Agents, the Registrar and the Calculation Agent reserve the right at any time to change theirrespective specified offices to some other specified office in the same metropolitan area. Notice of all changes in theidentities or specified offices of any Agent, the Registrar or the Calculation Agent will be given promptly by the Issueror the Guarantor to the Holders in accordance with Condition 14.
11.02 The Agents, the Registrar and the Calculation Agent act solely as agents of the Issuer and the Guarantor, and, incertain circumstances of the Bond Trustee, and save as provided in the Agency Agreement or any other agreemententered into with respect to its appointment, do not assume any obligations towards or relationship of agency or trust forany Holder of any Covered Bond, Receipt or Coupon and each of them shall only be responsible for the performance ofthe duties and obligations expressly imposed upon it in the Agency Agreement or other agreement entered into withrespect to its appointment or incidental thereto.
11.03 Notwithstanding the foregoing, the Issuing and Paying Agent, on behalf of itself and the other Paying Agents,shall have the right to decline to act as the Paying Agent with respect of any Covered Bonds issued pursuant to theProgramme that are payable and/or dischargeable by the Issuer by the payment or delivery of securities and/or otherproperty or any combination of cash, securities and/or property whereupon the Issuer or an affiliate thereof shall either (i)act as Paying Agent or (ii) engage another financial institution to act as Paying Agent in respect of such Covered Bonds.The Final Terms relating to such Covered Bonds shall include the relevant details regarding the applicable Paying Agent.
12. Replacement of Covered Bonds
If any Covered Bond, Receipt or Coupon is lost, stolen, mutilated, defaced or destroyed, it may be replaced at thespecified office of the Issuing and Paying Agent or any Paying Agent (in the case of Bearer Covered Bonds andCoupons) or of the Registrar or any Transfer Agent (in the case of Registered Covered Bonds) (the “ReplacementAgent”), subject to all applicable laws and the requirements of any stock exchange on which the Covered Bonds arelisted, upon payment by the claimant of all expenses incurred in connection with such replacement and upon such termsas to evidence, security, indemnity and otherwise as the Issuer and the Replacement Agent may require. Mutilated ordefaced Covered Bonds, Receipts and Coupons must be surrendered before replacements will be delivered therefor.
13. Meetings of Holders of the Covered Bonds, Modification and Waiver
The Trust Deed contains provisions for convening meetings of the holders of the Covered Bonds to consider any matteraffecting their interests, including the modification by Extraordinary Resolution of these Terms and Conditions or theprovisions of the Trust Deed. The quorum at any such meeting in respect of any Covered Bonds of any Series for passing
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an Extraordinary Resolution is one or more persons holding or representing not less than a clear majority of theaggregate Principal Amount Outstanding of the Covered Bonds of such Series for the time being outstanding, or at anyadjourned meeting one or more persons being or representing holders of the Covered Bonds whatever the nominalamount of the Covered Bonds of such Series so held or represented, except that at any meeting the business of whichincludes the modification of any Series Reserved Matter (as defined below), the quorum shall be one or more personsholding or representing not less than two-thirds of the aggregate Principal Amount Outstanding of the Covered Bonds ofsuch Series for the time being outstanding, or at any adjourned such meeting one or more persons holding or representingnot less than one third of the aggregate Principal Amount Outstanding of the Covered Bonds of such Series for the timebeing outstanding. An Extraordinary Resolution passed at any meeting of the holders of the Covered Bonds of a Seriesshall, subject as provided below, be binding on all the holders of the Covered Bonds of such Series, whether or not theyare present at the meeting, and on all Receiptholders and Couponholders in respect of such Series of Covered Bonds.Pursuant to the Trust Deed, the Bond Trustee may convene a single meeting of the holders of Covered Bonds of morethan one Series if in the opinion of the Bond Trustee there is no conflict between the holders of such Covered Bonds, inwhich event the provisions of this paragraph shall apply thereto mutatis mutandis.
Notwithstanding the provisions of the immediately preceding paragraph, any Extraordinary Resolution to direct the BondTrustee to accelerate the Covered Bonds pursuant to Condition 7 or to direct the Bond Trustee to take any enforcementaction (a “Programme Resolution”) shall only be capable of being passed at a single meeting of the holders of theCovered Bonds of all Series then outstanding. Any such meeting to consider a Programme Resolution may be convenedby the Issuer, the Guarantor or the Bond Trustee or by holders of the Covered Bonds of any Series. The quorum at anysuch meeting for passing a Programme Resolution is one or more persons holding or representing at least a clearmajority of the aggregate Principal Amount Outstanding of the Covered Bonds of all Series for the time beingoutstanding or at any adjourned such meeting one or more persons holding or representing Covered Bonds whatever thenominal amount of the Covered Bonds of any Series so held or represented. A Programme Resolution passed at anymeeting of the holders of the Covered Bonds of all Series shall be binding on all holders of the Covered Bonds of allSeries, whether or not they are present at the meeting, and on all related Receiptholders and Couponholders in respect ofsuch Series of Covered Bonds.
In connection with any meeting of the holders of Covered Bonds of more than one Series the Covered Bonds of anySeries not denominated in USD shall be converted into USD at the applicable Covered Bond Swap Rate.
The Bond Trustee, the Guarantor and the Issuer may also agree, without the consent of the holders of the CoveredBonds, Receiptholders or Couponholders of any Series and without the consent of the other Secured Creditors (and forthis purpose the Bond Trustee may disregard whether any such modification relates to a Series Reserved Matter), to:
(a) any modification of the Covered Bonds of one or more Series, the related Receipts and/or Coupons orany Transaction Document provided that in the opinion of the Bond Trustee such modification is notmaterially prejudicial to the interests of any of the holders of the Covered Bonds of any Series; or
(b) any modification of the Covered Bonds of any one or more Series, the related Receipts and/orCoupons or any Transaction Document which is of a formal, minor or technical nature or is in theopinion of the Bond Trustee made to correct a manifest error or to comply with mandatory provisionsof law.
The Bond Trustee may also agree, without the consent of the holders of the Covered Bonds of any Series, the relatedReceiptholders and/or Couponholders, to the waiver or authorization of any breach or proposed breach of any of theprovisions of the Covered Bonds of any Series, or determine, without any such consent as described above, that anyIssuer Event of Default or Guarantor Event of Default or Potential Issuer Event of Default or Potential Guarantor Eventof Default shall not be treated as such, provided that, in any such case, it is not, in the opinion of the Bond Trustee,materially prejudicial to the interests of any of the holders of the Covered Bonds of any Series.
Any such modification, waiver, authorization or determination shall be binding on all holders of the Covered Bonds ofall Series of Covered Bonds for the time being outstanding, the related Receiptholders and the Couponholders and theother Secured Creditors, and unless the Bond Trustee otherwise agrees, any such modification shall be notified by theIssuer to the holders of the Covered Bonds of all Series of Covered Bonds for the time being outstanding and the otherSecured Creditors in accordance with the relevant terms and conditions as soon as practicable thereafter.
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In connection with the exercise by it of any of its trusts, powers, authorities and discretions (including, withoutlimitation, any modification, waiver, authorization or determination), the Bond Trustee shall have regard to the generalinterests of the holders of the Covered Bonds of each Series as a class (but shall not have regard to any interests arisingfrom circumstances particular to individual holders of the Covered Bonds, Receiptholders or Couponholders whatevertheir number) and, in particular but without limitation, shall not have regard to the consequences of any such exercise forindividual holders of the Covered Bonds, the related Receiptholders, Couponholders (whatever their number) resultingfrom their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of,any particular territory or any political subdivision thereof and the Bond Trustee shall not be entitled to require, nor shallany holder of the Covered Bonds, Receiptholder or Couponholder be entitled to claim, from the Issuer, the Guarantor,the Bond Trustee or any other person any indemnification or payment in respect of any tax consequences of any suchexercise upon individual holders of the Covered Bonds, Receiptholders and/or Couponholders, except to the extentalready provided for in Condition 8 and/or in any undertaking or covenant given in addition to, or in substitution for,Condition 8 pursuant to the Trust Deed.
For the purposes of these Terms and Conditions:
“Potential Issuer Event of Default” means any condition, event or act which, with the lapse of time and/or the issue,making or giving of any notice, certification, declaration, demand, determination and/or request and/or the taking of anysimilar action and/or the fulfilment of any similar condition, would constitute an Issuer Event of Default;
“Potential Guarantor Event of Default” means any condition, event or act which, with the lapse of time and/or theissue, making or giving of any notice, certification, declaration, demand, determination and/or request and/or the takingof any similar action and/or the fulfilment of any similar condition, would constitute a Guarantor Event of Default; and
“Series Reserved Matter” in relation to Covered Bonds of a Series means: (i) reduction or cancellation of the amountpayable or, where applicable, modification of the method of calculating the amount payable or modification of the dateof payment or, where applicable, modification of the method of calculating the date of payment in respect of anyprincipal or interest in respect of the Covered Bonds; (ii) alteration of the currency in which payments under the CoveredBonds, Receipts and Coupons are to be made; (iii) alteration of the majority required to pass an ExtraordinaryResolution; (iv) any amendment to the Covered Bond Guarantee or the Security Agreement (except in a mannerdetermined by the Bond Trustee not to be materially prejudicial to the interests of the holders of the Covered Bonds ofany Series); (v) except in accordance with Condition 12, the sanctioning of any such scheme or proposal for theexchange or sale of the Covered Bonds for or the conversion of the Covered Bonds into, or the cancellation of theCovered Bonds in consideration of, shares, stock, covered bonds, bonds, debentures, debenture stock and/or otherobligations and/or securities of the Issuer or any other company formed or to be formed, or for or into or in considerationof cash, or partly for or into or in consideration of such shares, stock, bonds, covered bonds, debentures, debenture stockand/or other obligations and/or securities as described above and partly for or into or in consideration of cash and for theappointment of some person with power on behalf of the holders of the Covered Bonds to execute an instrument oftransfer of the Registered Covered Bonds held by them in favour of the persons with or to whom the Covered Bonds areto be exchanged or sold respectively; and (vi) alteration of specific sections of the Trust Deed relating to the quorum andprocedure required for meetings of holders of Covered Bonds.
14. Notices
To Holders of Bearer Definitive Covered Bonds
14.01 Notices to Holders of Bearer Definitive Covered Bonds will be deemed to be validly given if published in aleading daily newspaper having general circulation in London (which is expected to be the Financial Times). The Issuershall also ensure that notices are duly published in compliance with the requirements of each stock exchange or any otherrelevant authority on which the Covered Bonds are listed. Any notice so given will be deemed to have been validly givenon the date of first such publication (or, if required to be published in more than one newspaper, on the first date onwhich publication shall have been made in all the required newspapers). Holders of Coupons will be deemed for allpurposes to have notice of the contents of any notice given to Holders of Bearer Covered Bonds in accordance with thisCondition.
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To Holders of Registered Definitive Covered Bonds
14.02 Notices to Holders of Registered Definitive Covered Bonds, save where another means of effectivecommunication has been specified herein, will be deemed to be validly given if sent by first class mail (or equivalent) or,if posted to an overseas address, by air mail to them (or, in the case of joint Holders, to the first-named in the registerkept by the Registrar) at their respective addresses as recorded in the register kept by the Registrar, and will be deemedto have been validly given on the fourth weekday after the date of such mailing or, if posted from another country, on thefifth such day. The Issuer shall also ensure that notices are duly published in compliance with the requirements of eachstock exchange or any other relevant authority on which the Covered Bonds are listed.
To Issuer
14.03 Notices to be given by any holder of Covered Bonds to the Issuer shall be in writing and given by lodging thesame, together with the relevant Covered Bond or Covered Bonds, with the Issuing and Paying Agent or the Registrar, asthe case may be. While any of the Covered Bonds are represented by a Global Covered Bond, such notice may be givenby any accountholder to the Issuing and Paying Agent through Euroclear and/or Clearstream, Luxembourg, as the casemay be, in such manner as the Issuing and Paying Agent or the Registrar and Euroclear and/or Clearstream,Luxembourg, as the case may be, may approve for this purpose.
Global Covered Bonds
14.04 So long as the Covered Bonds are represented in their entirety by any Global Covered Bonds held on behalf ofDTC and/or CDS and/or Euroclear and/or Clearstream, Luxembourg, there may be substituted for publication innewspaper(s) (in accordance with Condition 14.01) the delivery of the relevant notice to DTC and/or CDS and/orEuroclear and/or Clearstream, Luxembourg for communication by them to the holders of the Covered Bonds and, inaddition, for so long as any Covered Bonds are listed on a stock exchange or admitted to listing by any other relevantauthority and the rules of the stock exchange, or as the case may be, other relevant authority so require, such notice willbe published in a manner which complies with the rules and regulations of that stock exchange, as the case may be, orany other relevant authority. Any such notice shall be deemed to have been given to the holders of the Covered Bonds onthe day on which the said notice was given to DTC and/or CDS and/or Euroclear and/or Clearstream, Luxembourg.
15. Further Issues
The Issuer may from time to time, without the consent of the Holders of any Covered Bonds or Coupons, create andissue further Covered Bonds having the same terms and conditions as such Covered Bonds in all respects (or in allrespects except for the first payment of interest, if any, on them and/or the Specified Denomination thereof) so as to forma single series with the Covered Bonds of any particular Series.
16. Currency Indemnity
The currency in which the Covered Bonds are denominated or, if different, payable, as specified in the Final Terms (the“Contractual Currency”), is the sole currency of account and payment for all sums payable by the Issuer in respect ofthe Covered Bonds, including damages. Any amount received or recovered in a currency other than the ContractualCurrency (whether as a result of, or of the enforcement of, a judgement or order of a court of any jurisdiction orotherwise) by any Holder of a Covered Bond or Coupon in respect of any sum expressed to be due to it from the Issuershall only constitute a discharge to the Issuer to the extent of the amount in the Contractual Currency which such Holderis able to purchase with the amount so received or recovered in that other currency on the date of that receipt or recovery(or, if it is not practicable to make that purchase on that date, on the first day on which it is practicable to do so). If thatamount is less than the amount in the Contractual Currency expressed to be due to any Holder of a Covered Bond orCoupon in respect of such Covered Bond or Coupon the Issuer shall indemnify such Holder against any loss sustained bysuch Holder as a result. In any event, the Issuer shall indemnify each such Holder against any cost of making suchpurchase which is reasonably incurred. These indemnities constitute a separate and independent obligation from theIssuer’s other obligations, shall give rise to a separate and independent cause of action, shall apply irrespective of anyindulgence granted by any Holder of a Covered Bond or Coupon and shall continue in full force and effect despite anyjudgement, order, claim or proof for a liquidated amount in respect of any sum due in respect of the Covered Bonds or
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any judgement or order. Any such loss shall be deemed to constitute a loss suffered by the relevant Holder of a CoveredBond or Coupon and no proof or evidence of any actual loss will be required by the Issuer.
17. Waiver and Remedies
No failure to exercise, and no delay in exercising, on the part of the Holder of any Covered Bond, any right hereundershall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or future exercisethereof or the exercise of any other right. Rights hereunder shall be in addition to all other rights provided by law. Nonotice or demand given in any case shall constitute a waiver of rights to take other action in the same, similar or otherinstances without such notice or demand.
18. Branch of Account
18.01 For the purposes of the Bank Act, the branch of the Bank set out in a Covered Bond or the related Final Termsshall be the branch of account (the “Branch of Account”) for the deposits evidenced by such Covered Bond.
18.02 Each Covered Bond will be paid without the necessity of first being presented for payment at the Branch ofAccount.
18.03 If the Branch of Account is not in Canada, the Bank may change the Branch of Account for the depositsevidenced by any Covered Bond, upon not less than seven days’ prior notice to its Holder given in accordance withCondition 14 and upon and subject to the following terms and conditions:
(a) if such Covered Bond is denominated in Yen, the Branch of Account shall not be in Japan;
(b) the Issuer shall indemnify and hold harmless the Holders of such Covered Bonds and Couponsrelating thereto against any tax, duty, assessment or governmental charge which is imposed or leviedupon such Holder as a consequence of such change, and shall pay the reasonable costs and expensesof the Issuing and Paying Agent in connection with such change; and
(c) notwithstanding (b) above, no change of the Branch of Account may be made unless immediatelyafter giving effect to such change (i) no Issuer Event of Default, Guarantor Event of Default, PotentialIssuer Event of Default or Potential Guarantor Event of Default shall have occurred and be continuingand (ii) payments of principal and interest on Covered Bonds of such Series and Coupons relatingthereto to Holders thereof (other than Excluded Holders, as hereinafter defined) shall not, in theopinion of counsel to the Issuer, be subject to any taxes, as hereinafter defined, to which they wouldnot have been subject had such change not taken place. For the purposes of this section, an “ExcludedHolder” means a Holder of a Covered Bond of such Series or Coupon relating thereto who is subjectto taxes by reason of his having some connection with the Relevant Jurisdiction other than the mereholding of a Covered Bond of such Series or Coupon as a non-resident of such Relevant Jurisdiction.“Relevant Jurisdiction” means and includes Canada, its provinces or territories and the jurisdictionin which the new Branch of Account is located, and “taxes” means and includes any tax, duty,assessment or other governmental charge imposed or levied in respect of the payment of the principalof the Covered Bonds of such Series or interest thereon for or on behalf of a Relevant Jurisdiction orany authority therein or thereof having power to tax.
19. Substitution
Subject as provided in the Trust Deed, the Bond Trustee, if it is satisfied that to do so would not be materially prejudicialto the interests of the holders of the Covered Bonds, may agree, without the consent of the holders of the Covered Bonds,Receiptholders or Couponholders, to the substitution of a Subsidiary of the Issuer in place of the Issuer as principaldebtor under the Covered Bonds and the Trust Deed, provided that the obligations of such Subsidiary in respect of theCovered Bonds and the Trust Deed shall be guaranteed by the Issuer in such form as the Bond Trustee may require.
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Any substitution pursuant to this Condition 19 shall be binding on the holders of the Covered Bonds, the Receiptholdersand the Couponholders and, unless the Bond Trustee agrees otherwise, shall be notified to the holders of the CoveredBonds as soon as practicable thereafter in accordance with Condition 14.
It shall be a condition of any substitution pursuant to this Condition 19 that (i) the Covered Bond Guarantee shall remainin place or be modified to apply mutatis mutandis and continue in full force and effect in relation to any Subsidiary of theIssuer which is proposed to be substituted for the Issuer as principal debtor under the Covered Bonds and the Trust Deed;and (ii) any Subsidiary of the Issuer which is proposed to be substituted for the Issuer is included in the Registry as aregistered issuer and that all other provisions of the Covered Bond Legislative Framework and the CMHC Guide aresatisfied prior to the substitution of the Issuer.
20. Rating Agency Condition
20.01 By subscribing for or purchasing Covered Bond(s), each holder of Covered Bonds shall be deemed to haveacknowledged and agreed that a credit rating of a Series of Covered Bonds by the Rating Agencies is an assessment ofcredit risk and does not address other matters that may be of relevance to holders of Covered Bonds, including, withoutlimitation, in the case of a confirmation by each Rating Agency that any action proposed to be taken by the Issuer, theGuarantor, the Seller, the Servicer, the Cash Manager, the Bond Trustee or any other party to a Transaction Documentwill not result in a reduction or withdrawal of the rating of the Covered Bonds in effect immediately before the taking ofsuch action (a “Rating Agency Condition”), whether such action is either (i) permitted by the terms of the relevantTransaction Document or (ii) in the best interests of, or not prejudicial to, some or all of the holders of Covered Bonds.
20.02 In being entitled to have regard to the fact that a Rating Agency has confirmed that the then current rating of therelevant Series of Covered Bonds would not be reduced or withdrawn, each of the Issuer, the Guarantor, the BondTrustee, and the Secured Creditors (including the holders of Covered Bonds) is deemed to have acknowledged andagreed that confirmation of the satisfaction of the Rating Agency Condition does not impose or extend any actual orcontingent liability on the Rating Agencies to the Issuer, the Guarantor, the Bond Trustee, the Secured Creditors(including the holders of Covered Bonds) or any other person or create any legal relations between the Rating Agenciesand the Issuer, the Guarantor, the Bond Trustee, the Secured Creditors (including the holders of Covered Bonds) or anyother person whether by way of contract or otherwise.
20.03 By subscribing for or purchasing Covered Bond(s), each holder of Covered Bonds shall be deemed to haveacknowledged and agreed that:
(a) a confirmation of the satisfaction of the Rating Agency Condition may or may not be given at the solediscretion of each Rating Agency;
(b) depending on the timing of delivery of the request and any information needed to be provided as partof any such request, it may be the case that a Rating Agency cannot confirm the satisfaction of theRating Agency Condition in the time available, or at all, and the Rating Agency shall not beresponsible for the consequences thereof;
(c) a confirmation of the satisfaction of the Rating Agency Condition, if given, will be given on the basisof the facts and circumstances prevailing at the relevant time, and in the context of cumulativechanges to the transaction of which the Covered Bonds forms a part; and
(d) a confirmation of the satisfaction of the Rating Agency Condition represents only a restatement of theopinions given, and shall not be construed as advice for the benefit of any holder of Covered Bonds orany other party.
20.04 If a confirmation of the satisfaction of the Rating Agency Condition or some other response by a Rating Agencyis a condition to any action or step or is otherwise required under any Transaction Document and a written request forsuch confirmation of the satisfaction of the Rating Agency Condition or response is delivered to that Rating Agency byany of the Issuer, the Guarantor and/or the Bond Trustee, as applicable (each a “Requesting Party”), and either (i) theRating Agency indicates that it does not consider such confirmation or response necessary in the circumstances or (ii)
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within 30 days (or, in the case of Moody’s or Fitch, 10 Business Days) of actual receipt of such request by the RatingAgency, such request elicits no confirmation or response and/or such request elicits no statement by the Rating Agencythat such confirmation or response could not be given, the Requesting Party will be entitled to disregard the requirementfor satisfaction of the Rating Agency Condition or affirmation of rating or other response by the Rating Agency andproceed on the basis that such confirmation or affirmation of rating or other response by the Rating Agency is notrequired in the particular circumstances of the request. The failure by a Rating Agency to respond to a written requestfor a confirmation or affirmation shall not be interpreted to mean that such Rating Agency has given any deemedconfirmation of the satisfaction of the Rating Agency Condition or affirmation of rating or other response in respect ofsuch action or step.
21. Indemnification of Bond Trustee and Bond Trustee contracting with the Issuer and/or the Guarantor
If, in connection with the exercise of its powers, trusts, authorities or discretions the Bond Trustee is of the opinion thatthe interests of the holders of the Covered Bonds of any one or more Series would be materially prejudiced thereby, theBond Trustee shall not exercise such power, trust, authority or discretion without the approval by ExtraordinaryResolution of such holders of the relevant Series of Covered Bonds then outstanding or by a direction in writing of suchholders of the Covered Bonds of at least 25 per cent. of the Principal Amount Outstanding of Covered Bonds of therelevant Series then outstanding.
The Trust Deed and the Security Agreement contain provisions for the indemnification of the Bond Trustee and for relieffrom responsibility, including provisions relieving the Bond Trustee from taking any action unless indemnified and/orsecured to the satisfaction of the Bond Trustee.
The Trust Deed and the Security Agreement also contain provisions pursuant to which the Bond Trustee is entitled,among other things: (i) to enter into business transactions with the Issuer, the Guarantor and/or any of their respectiveSubsidiaries and affiliates and to act as trustee for the holders of any other securities issued or guaranteed by, or relatingto, the Issuer, the Guarantor and/or any of their respective Subsidiaries and affiliates; (ii) to exercise and enforce itsrights, comply with its obligations and perform its duties under or in relation to any such transactions or, as the case maybe, any such trusteeship without regard to the interests of, or consequences for, the holders of the Covered Bonds,Receiptholders or Couponholders or the other Secured Creditors; and (iii) to retain and not be liable to account for anyprofit made or any other amount or benefit received thereby or in connection therewith.
The Bond Trustee will not be responsible for any loss, expense or liability, which may be suffered as a result of anyPortfolio Assets, or any deeds or documents of title thereto, being uninsured or inadequately insured or being held byclearing organizations or their operators or by intermediaries such as banks, brokers or other similar persons on behalf ofthe Bond Trustee. The Bond Trustee will not be responsible for: (i) supervising the performance by the Issuer or anyother party to the Transaction Documents of their respective obligations under the Transaction Documents and the BondTrustee will be entitled to assume, until it has written notice to the contrary, that all such persons are properly performingtheir duties; (ii) considering the basis on which approvals or consents are granted by the Issuer or any other party to theTransaction Documents under the Transaction Documents; (iii) monitoring the Covered Bond Portfolio, including,without limitation, whether the Covered Bond Portfolio is in compliance with the Asset Coverage Test and/or theAmortization Test; or (iv) monitoring whether the Portfolio Assets satisfy the Eligibility Criteria. The Bond Trustee willnot be liable to any holder of the Covered Bonds or other Secured Creditor for any failure to make or to cause to be madeon their behalf the searches, investigations and enquiries which would normally be made by reasonable and prudentinstitutional mortgage lenders in the Seller’s market in relation to the Security and have no responsibility in relation tothe legality, validity, sufficiency and enforceability of the Security and the Transaction Documents.
22. Law and Jurisdiction
The Trust Deed, Agency Agreement, the Covered Bonds and Receipts, Coupons and Talons related thereto and the otherTransaction Documents, except as specified therein, are governed by and shall be construed in accordance with the lawsof the Province of Ontario and the federal laws of Canada applicable therein.
A13, 4.3
MT DOCS 12391588v6
SCHEDULE 2FORMS OF BEARER GLOBAL AND DEFINITIVE COVERED BONDS, RECEIPTS,
COUPONS AND TALONS
PART 1FORM OF TEMPORARY GLOBAL COVERED BOND
THIS NOTE DOES NOT CONSTITUTE A DEPOSIT THAT IS INSURED UNDER THECANADA DEPOSIT INSURANCE CORPORATION ACT.
LE PRÉSENT DOCUMENT NE CONSTITUE PAS UN DÉPÔT ASSURÉEN VERTU DE LA LOI SUR LA SOCIÉTÉ D’ASSURANCE - DÉPÔTS DU CANADA.
Series Number: [ ]
Serial Number: [ ]
Tranche Number: [ ]
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BESUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS,INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OFTHE INTERNAL REVENUE CODE.]1
THIS SECURITY AND ANY GUARANTEE IN RESPECT THEREOF HAS NOT BEENAND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, ASAMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE U.S. STATESECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLDWITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE AGENCY AGREEMENT INRESPECT OF THIS SECURITY (THE “AGENCY AGREEMENT”) AND PURSUANTTO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT ORPURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THESECURITIES ACT.
National Bank of Canada(the “Issuer”)
(a Canadian chartered Bank)
TEMPORARY GLOBAL COVERED BOND
1 Delete where the original maturity of the Bonds is 1 year or less.
MT DOCS 12391588v6
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and
unconditionally and irrevocably guaranteed as to payments of interest and principal by
NBC Covered Bond (Legislative) Guarantor Limited Partnership(established under the Limited Partnerships Act (Ontario))
(the “Guarantor”)
This Covered Bond is a Temporary Global Covered Bond in respect of a duly authorized issue ofCovered Bonds of the Issuer (the “Covered Bonds”) of the aggregate nominal amount, SpecifiedCurrency(ies) and Specified Denomination(s) as are specified in the Final Terms applicable tothe Covered Bonds (the “Final Terms”), a copy of which is annexed hereto. References hereinto the Conditions shall be to the Terms and Conditions of the Covered Bonds as set out inSchedule 1 to the Trust Deed (as defined below) as supplemented, replaced and modified by theFinal Terms but, in the event of any conflict between the provisions of the said Conditions andthe information in the Final Terms, the Final Terms will prevail.
Words and expressions defined in the Conditions shall bear the same meanings when used in thisGlobal Covered Bond.
This Global Covered Bond is issued subject to, and with the benefit of, the Conditions and aTrust Deed (such Trust Deed as modified and/or supplemented and/or restated from time to time,the “Trust Deed”) dated October 31, 2013 made between the Issuer, the Guarantor andComputershare Trust Company of Canada as Bond Trustee for, inter alios, the holders of theCovered Bonds.
For value received, the Issuer, subject as hereinafter provided and subject to and in accordancewith the Conditions and the Trust Deed, promises to (i) pay to the bearer hereof on eachInstalment Date (if the Covered Bonds are repayable in instalments) and on the Final MaturityDate and/or on such earlier date(s) as all or any of the Covered Bonds represented by this GlobalCovered Bond may become due and repayable in accordance with the Conditions and the TrustDeed, the amount payable under the Conditions in respect of such Covered Bonds on each suchdate and to pay interest (if any) on the Principal Amount Outstanding of the Covered Bonds fromtime to time represented by this Global Covered Bond calculated and payable as provided in theConditions and the Trust Deed together with any other sums payable under the Conditions andthe Trust Deed, and (ii) perform all, if any, delivery obligations to be assumed or incurred by itunder the Conditions, in each case upon presentation and, at maturity, surrender of this GlobalCovered Bond at the specified office of the Issuing and Paying Agent at One Canada Square, 48th
Floor, London, E14 4AL, United Kingdom or such other specified office as may be specified forthis purpose in accordance with the Conditions or at the specified office of any of the otherPaying Agents located outside the United States, its territories and possessions (except asprovided in the Conditions) from time to time appointed by the Issuer in respect of the CoveredBonds.
If the Final Terms indicate that this Global Covered Bond is intended to be a new global CoveredBond (“NGCB”), the nominal amount of Covered Bonds represented by this Global CoveredBond shall be the aggregate amount from time to time entered in the records of both Euroclear
MT DOCS 12391588v6
3
Bank S.A./N.V. (“Euroclear”) and Clearstream Banking, société anonyme (“Clearstream,Luxembourg”, and together with Euroclear, the “relevant Clearing Systems”). The records ofthe relevant Clearing Systems (which expression in this Global Covered Bond means the recordsthat each relevant Clearing System holds for its customers which reflect the amount of each suchcustomer’s interest in the Global Covered Bonds) shall be conclusive evidence of the nominalamount of Global Covered Bonds represented by this Global Covered Bond and, for thesepurposes, a statement issued by a relevant Clearing System (which statement shall be madeavailable to the bearer upon request) stating the nominal amount of Covered Bonds representedby this Global Covered Bond at any time shall be conclusive evidence of the records of therelevant Clearing System at that time.
If the Final Terms indicate that this Global Covered Bond is not intended to be a NGCB, thenominal amount of the Covered Bonds represented by this Global Covered Bond shall be theamounts stated in the applicable Final Terms or, if lower, the nominal amount most recentlyentered by or on behalf of the Issuer in the relevant column in Part II, III or IV of Schedule Onehereto or in Schedule Two hereto.
On any redemption or payment of an instalment or interest being made in respect of, or purchaseand cancellation of, any of the Covered Bonds represented by this Global Covered Bond theIssuer shall procure that:
(i) if the Final Terms indicate that this Global Covered Bond is intended to be a NGCB,details of such redemption, payment or purchase and cancellation (as the case may be)shall be entered pro tanto in the records of the relevant Clearing Systems, and, upon anysuch entry being made, the nominal amount of the Covered Bonds recorded in the recordsof the relevant Clearing Systems and represented by this Global Covered Bond shall bereduced by the aggregate nominal amount of the Covered Bonds so redeemed orpurchased and cancelled or by the aggregate amount of such instalment so paid; or
(ii) if the Final Terms indicate that this Global Covered Bond is not intended to be a NGCB,details of such redemption, payment, purchase and cancellation (as the case may be) shallbe entered by or on behalf of the Issuer in Schedule One hereto and the relevant space inSchedule One hereto recording any such redemption, payment, purchase and cancellation(as the case may be) shall be signed by or on behalf of the Issuer. Upon any suchredemption, payment of an instalment, purchase and cancellation the Principal AmountOutstanding of this Global Covered Bond and the Covered Bonds represented by thisGlobal Covered Bond shall be reduced by the Principal Amount Outstanding of suchCovered Bonds so redeemed or purchased and cancelled or the amount of suchinstalment.
Payments of principal and interest (if any) due prior to the Exchange Date (as defined below)will only be made to the bearer hereof to the extent that there is presented to the Issuing andPaying Agent by Clearstream, Luxembourg or Euroclear a certificate in or substantially in theform set out in Part 7 of Schedule 2 to the Trust Deed to the effect that it has received from or inrespect of a person entitled to a particular principal amount of the Covered Bonds represented bythis Global Covered Bond (as shown by its records) a certificate in or substantially in the form of
MT DOCS 12391588v6
4
Certificate “A” as set out in Part 7 of Schedule 2 to the Trust Deed. The bearer of this GlobalCovered Bond will not (unless upon due presentation of this Global Covered Bond for exchange,delivery of the appropriate number of Definitive Covered Bonds (together, if applicable, with theReceipts, Coupons and Talons appertaining thereto in or substantially in the forms set out inParts 3, 4, 5 and 6 of Schedule 2 to the Trust Deed) or, as the case may be, issue and delivery (or,as the case may be, endorsement) of the Permanent Global Covered Bond is improperly withheldor refused and such withholding or refusal is continuing at the relevant payment date) be entitledto receive any payment hereon due on or after the Exchange Date.
On or after the date (the “Exchange Date”) which is 40 days after the Issue Date, this GlobalCovered Bond may be exchanged (free of charge) in whole or in part for, as specified in theFinal Terms, either (a) Bearer Definitive Covered Bonds and (if applicable) Receipts, Couponsand/or Talons (on the basis that all the appropriate details have been included on the face of suchBearer Definitive Covered Bonds and (if applicable) Receipts, Coupons and/or Talons and therelevant information supplementing, replacing or modifying the Conditions appearing in theFinal Terms has been endorsed on or attached to such Bearer Definitive Covered Bonds) or (b)either (if the Final Terms indicate that this Global Covered Bond is intended to be a NGCB)interests recorded in the records of the relevant Clearing Systems in a Permanent Global CoveredBond or (if the Final Terms indicate that this is not intended to be a NGCB) a Permanent GlobalCovered Bond, which, in either case, is in or substantially in the form set out in Part 2 ofSchedule 2 to the Trust Deed (together with the Final Terms attached thereto) upon notice beinggiven by Euroclear and/or Clearstream, Luxembourg acting on the instructions of any holder ofan interest in this Global Covered Bond and subject, in the case of Bearer Definitive CoveredBonds, to such notice period as is specified in the Final Terms.
If Bearer Definitive Covered Bonds and (if applicable) Receipts, Coupons and/or Talons havealready been issued in exchange for all the Covered Bonds represented for the time being by thePermanent Global Covered Bond, then this Global Covered Bond may only thereafter beexchanged for Bearer Definitive Covered Bonds and (if applicable) Receipts, Coupons and/orTalons pursuant to the terms hereof.
Presentation of this Global Covered Bond for exchange shall be made by the bearer hereof onany Business Day in London at the office of the Issuing and Paying Agent specified above. TheIssuer shall procure that Bearer Definitive Covered Bonds or (as the case may be) the PermanentGlobal Covered Bond shall be so issued and delivered and (in the case of the Permanent GlobalCovered Bond where the Final Terms indicate that this Global Covered Bond is intended to be aNGCB) interests in the Permanent Global Covered Bond shall be recorded in the records of therelevant Clearing Systems in exchange for only that portion of this Global Covered Bond inrespect of which there shall have been presented to the Issuing and Paying Agent by Euroclear orClearstream, Luxembourg a certificate in or substantially in the form set out in Part 7 ofSchedule 2 to the Trust Deed to the effect that it has received from or in respect of a personentitled to a particular nominal amount of the Covered Bonds represented by this Global CoveredBond (as shown by its records) a certificate in or substantially in the form of Certificate “A” asset out in Part 7 of Schedule 2 to the Trust Deed.
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On an exchange of the whole of this Global Covered Bond, this Global Covered Bond shall besurrendered to the Issuing and Paying Agent. The Issuer shall procure that:
(i) if the Final Terms indicate that this Global Covered Bond is intended to be a NGCB, onan exchange of the whole or part only of this Global Covered Bond, details of suchexchange shall be entered pro tanto in the records of the relevant Clearing Systems suchthat the nominal amount of Covered Bonds represented by this Global Covered Bondshall be reduced by the nominal amount of this Global Covered Bond so exchanged; or
(ii) if the Final Terms indicate that this Global Covered Bond is not intended to be a NGCB,on an exchange of part only of this Global Covered Bond, details of such exchange shallbe entered by or on behalf of the Issuer in Schedule Two hereto and the relevant space inSchedule Two hereto recording such exchange shall be signed by or on behalf of theIssuer, whereupon the nominal amount of this Global Covered Bond and the CoveredBonds represented by this Global Covered Bond shall be reduced by the PrincipalAmount Outstanding of this Global Covered Bond so exchanged. On any exchange ofthis Global Covered Bond for a Permanent Global Covered Bond, details of suchexchange shall be entered by or on behalf of the Issuer in Schedule Two to the PermanentGlobal Covered Bond and the relevant space in Schedule Two thereto recording suchexchange shall be signed by or on behalf of the Issuer.
Until the exchange of the whole of this Global Covered Bond as aforesaid, the bearer hereofshall (subject as provided in the next paragraph) in all respects (except as otherwise providedherein) be entitled to the same benefits as if he were the bearer of Bearer Definitive CoveredBonds and the relative Receipts, Coupons and/or Talons (if any) in the form(s) set out in Parts 3,4, 5 and 6 (as applicable) of Schedule 2 to the Trust Deed.
Each person (other than Euroclear or Clearstream, Luxembourg) who is for the time being shownin the records of Euroclear or Clearstream, Luxembourg as the holder of a particular principalamount of the Covered Bonds represented by this Global Covered Bond (in which regard anycertificate or other document issued by Euroclear or Clearstream, Luxembourg as to the principalamount of such Covered Bonds standing to the account of any person shall be conclusive andbinding for all purposes save in the case of manifest error) shall be treated by the Issuer, theGuarantor, the Bond Trustee, the Issuing and Paying Agent and any other Paying Agent as theholder of such principal amount of such Covered Bonds for all purposes other than with respectto the payment of principal and interest on such principal amount of such Covered Bonds, theright to which shall be vested, as against the Issuer and the Guarantor, solely in the bearer of thisGlobal Covered Bond in accordance with and subject to the terms of this Global Covered Bondand the Trust Deed.
For the purposes of disclosure pursuant to the Interest Act (Canada) and not for any otherpurpose, where in any Covered Bond (i) a rate of interest is to be calculated on the basis of a yearof 360 days, the yearly rate of interest to which the 360 day rate is equivalent is such ratemultiplied by the number of days in the year for which such calculation is made and divided by360, or (ii) a rate of interest is to be calculated during a leap year, the yearly rate of interest towhich such rate is equivalent is such rate multiplied by 366 and divided by 365.
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This Global Covered Bond is governed by, and shall be construed in accordance with the laws ofthe Province of Ontario and the federal laws of Canada applicable therein.
This Global Covered Bond shall not be valid unless authenticated by The Bank of New YorkMellon, London Branch, as Issuing and Paying Agent and, if the Final Terms indicate that thisGlobal Covered Bond is intended to be held in a manner which would allow Eurosystemeligibility, effectuated by the entity appointed as common safekeeper by the relevant ClearingSystems.
IN WITNESS whereof the Issuer has caused this Global Covered Bond to be signed manually orin facsimile by a person duly authorized on its behalf.
Issued as of [ ].
National Bank of Canada
By: By:Duly Authorized Duly Authorized
Authenticated by:
The Bank of New York Mellon, LondonBranchas Issuing and Paying Agent without recourse, warranty or liability
By:Authorized Officer
Effectuated without recourse,warranty or liability2
as Common Safekeeper
By:
2Common Safekeeper to effectuate only where the Final Terms indicate that the Global Covered Bond is intended
to be a NGCB.
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Schedule One
PART I
INTEREST PAYMENTS
Date madeInterestPayment Date
Total amount ofinterest payable
Amount ofinterest paid
Confirmation ofpayment by oron behalf of theIssuer
Schedule One should only be completed where the Final Terms indicate that this Global Covered Bond isintended to be a NGCB.
MT DOCS 12391588v6
PART II
PAYMENT OF INSTALMENT AMOUNTS
Date made
Total amount ofInstalmentAmountspayable
Amount ofInstalmentAmounts paid
RemainingPrincipalAmountOutstanding ofthis GlobalCovered Bondfollowing suchpayment3
Confirmation ofpayment by oron behalf of theIssuer
3 See most recent entry in Part II, III or IV or Schedule Two in order to determine this amount.
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PART III
REDEMPTIONS
Date made
Total amount ofprincipalpayable
Amount ofprincipal paid(whether incash or bydelivery ofassets)
RemainingPrincipalAmountOutstanding ofthis GlobalCovered Bondfollowing suchredemption4
Confirmation ofpayment by oron behalf of theIssuer
4 See most recent entry in Part II, III or IV or Schedule Two in order to determine this amount.
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PART IV
PURCHASES AND CANCELLATIONS
Date made
Part of thePrincipal AmountOutstanding of thisGlobal CoveredBond purchasedand cancelled
RemainingPrincipal AmountOutstanding ofthis GlobalCovered Bondfollowing suchredemption5
Confirmation ofpurchase andcancellation byor on behalf ofthe Issuer
5 See most recent entry in Part II, III or IV or Schedule Two in order to determine this amount.
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Schedule Two*
EXCHANGES
FOR BEARER DEFINITIVE COVERED BONDS OR PERMANENT GLOBALCOVERED BOND
The following exchanges of a part of this Global Covered Bond for Bearer Definitive CoveredBonds or a part of a Permanent Global Covered Bond have been made:
Date made
Principal AmountOutstanding of thisGlobal CoveredBond exchangedfor DefinitiveCovered Bonds ora part of aPermanent GlobalCovered Bond
RemainingPrincipal AmountOutstanding ofthis GlobalCovered Bondfollowing suchexchange6
Notation madeby or on behalfof the Issuer
* Schedule Two should only be completed where the Final Terms indicate that this Global Covered Bond isintended to be a NGCB.
6 See most recent entry in Part II, III or IV of Schedule One or in this Schedule Two in order to determinethis amount.
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PART 2FORM OF PERMANENT GLOBAL COVERED BOND
THIS NOTE DOES NOT CONSTITUTE A DEPOSIT THAT IS INSURED UNDER THECANADA DEPOSIT INSURANCE CORPORATION ACT.
LE PRÉSENT DOCUMENT NE CONSTITUE PAS UN DÉPÔT ASSURÉEN VERTU DE LA LOI SUR LA SOCIÉTÉ D’ASSURANCE - DÉPÔTS DU CANADA.
Series Number: [ ]
Serial Number: [ ]
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BESUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS,INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OFTHE INTERNAL REVENUE CODE.]7
THIS SECURITY AND ANY GUARANTEE IN RESPECT THEREOF HAS NOT BEENAND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, ASAMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE U.S. STATESECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLDWITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE AGENCY AGREEMENT INRESPECT OF THIS SECURITY (THE “AGENCY AGREEMENT”) AND PURSUANTTO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT ORPURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THESECURITIES ACT.
National Bank of Canada(the “Issuer”)
(a Canadian chartered Bank)
PERMANENT GLOBAL COVERED BOND
and
unconditionally and irrevocably guaranteed as to payments of interest and principal by
NBC Covered Bond (Legislative) Guarantor Limited Partnership(established under the Limited Partnerships Act (Ontario))
(the “Guarantor”)
7 Delete where the original maturity of the Covered Bonds is 1 year or less.
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This Covered Bond is a Permanent Global Covered Bond in respect of a duly authorized issue ofCovered Bonds of the Issuer (the “Covered Bonds”) of the aggregate nominal amount, SpecifiedCurrency(ies) and Specified Denomination(s) as are specified in the Final Terms applicable tothe Covered Bonds (the “Final Terms”), a copy of which is annexed hereto. References hereinto the Conditions shall be to the Terms and Conditions of the Covered Bonds as set out inSchedule 1 to the Trust Deed (as defined below) as supplemented, replaced and modified by theFinal Terms but, in the event of any conflict between the provisions of the said Conditions andthe information in the Final Terms, the Final Terms will prevail.
Words and expressions defined in the Conditions shall bear the same meanings when used in thisGlobal Covered Bond.
This Global Covered Bond is issued subject to, and with the benefit of, the Conditions and aTrust Deed (such Trust Deed as modified and/or supplemented and/or restated from time to time,the “Trust Deed”) dated October 31, 2013 made between the Issuer, the Guarantor andComputershare Trust Company of Canada as Bond Trustee for, inter alios, the holders of theCovered Bonds.
For value received, the Issuer, subject to and in accordance with the Conditions and the TrustDeed, promises to (i) pay to the bearer hereof on each Instalment Date (if the Covered Bonds arerepayable in instalments) and on the Final Maturity Date and/or on such earlier date(s) as all orany of the Covered Bonds represented by this Global Covered Bond may become due andrepayable in accordance with the Conditions and the Trust Deed, the amount payable under theConditions in respect of such Covered Bonds on each such date and to pay interest (if any) on thePrincipal Amount Outstanding of the Covered Bonds from time to time represented by thisGlobal Covered Bond calculated and payable as provided in the Conditions and the Trust Deedtogether with any other sums payable under the Conditions and the Trust Deed, and (ii) performall, if any, delivery obligations to be assumed or incurred by it under the Conditions, in each caseupon presentation and, at maturity, surrender of this Global Covered Bond at the specified officeof the Issuing and Paying Agent at One Canada Square, 48th Floor, London, E14 4AL, UnitedKingdom or such other specified office as may be specified for this purpose in accordance withthe Conditions or at the specified office of any of the other Paying Agents located outside theUnited States, its territories and possessions (except as provided in the Conditions) from time totime appointed by the Issuer in respect of the Covered Bonds.
If the Final Terms indicate that this Global Covered Bond is intended to be a new global CoveredBond (“NGCB”), the nominal amount of Covered Bonds represented by this Global CoveredBond shall be the aggregate amount from time to time entered in the records of both EuroclearBank S.A./N.V. (“Euroclear”) and Clearstream Banking, société anonyme (“Clearstream,Luxembourg”, and together with Euroclear, the “relevant Clearing Systems”). The records ofthe relevant Clearing Systems (which expression in this Global Covered Bond means the recordsthat each relevant Clearing System holds for its customers which reflect the amount of each suchcustomer’s interest in the Global Covered Bonds) shall be conclusive evidence of the nominalamount of Global Covered Bonds represented by this Global Covered Bond and, for thesepurposes, a statement issued by a relevant Clearing System (which statement shall be madeavailable to the bearer upon request) stating the nominal amount of Covered Bonds represented
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by this Global Covered Bond at any time shall be conclusive evidence of the records of therelevant Clearing System at that time.
If the Final Terms indicate that this Global Covered Bond is not intended to be a NGCB, thenominal amount of the Covered Bonds represented by this Global Covered Bond shall be theamounts stated in the applicable Final Terms or, if lower, the nominal amount most recentlyentered by or on behalf of the Issuer in the relevant column in Part II, III or IV of Schedule Onehereto or in Schedule Two hereto.
On any redemption or payment of an instalment or interest being made in respect of, or purchaseand cancellation of, any of the Covered Bonds represented by this Global Covered Bond theIssuer shall procure that:
(i) if the Final Terms indicate that this Global Covered Bond is intended to be a NGCB,details of such redemption, payment or purchase and cancellation (as the case may be)shall be entered pro tanto in the records of the relevant Clearing Systems such that thenominal amount of Covered Bonds represented by this Global Covered Bond shall bereduced by the nominal amount of this Global Covered Bond so redeemed or purchasedand cancelled or the amount of such instalment; or
(ii) if the Final Terms indicate that this Global Covered Bond is not intended to be a NGCB,details of such redemption, payment, purchase and cancellation (as the case may be) shallbe entered by or on behalf of the Issuer in Schedule One hereto and the relevant space inSchedule One hereto recording any such redemption, payment, purchase and cancellation(as the case may be) shall be signed by or on behalf of the Issuer. Upon any suchredemption, payment of an instalment, purchase and cancellation the nominal amount ofthis Global Covered Bond and the Covered Bonds represented by this Global CoveredBond shall be reduced by the Principal Amount Outstanding of such Covered Bonds soredeemed or purchased and cancelled or the amount of such instalment.
Where TEFRA D is specified in the applicable Final Terms, the Covered Bonds will initiallyhave been represented by one or more Temporary Global Covered Bonds. On any exchange ofany such Temporary Global Covered Bond issued in respect of the Covered Bonds or any part ofit for this Global Covered Bond or any part hereof, the Issuer shall procure that:
(i) if the Final Terms indicate that this Global Covered Bond is intended to be a NGCB,details of such exchange shall be entered in the records of the relevant Clearing Systemssuch that the nominal amount of Covered Bonds represented by this Global CoveredBond shall be increased by the nominal amount of the Temporary Global Covered Bondso exchanged; or
(ii) if the Final Terms indicate that this Global Covered Bond is not intended to be a NGCB,details of such exchange shall be entered by or on behalf of the Issuer in Schedule Twohereto and the relevant space in Schedule Two hereto recording such exchange shall besigned by or on behalf of the Issuer, whereupon the Principal Amount Outstanding of thisGlobal Covered Bond and the Covered Bonds represented by this Global Covered Bond
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shall be increased by the nominal amount of the Temporary Global Covered Bond soexchanged.
In certain circumstances further Covered Bonds may be issued which are intended on issue to beconsolidated and form a single Series with the Covered Bonds. In such circumstances the Issuershall procure that:
(i) if the applicable Final Terms indicate that this Permanent Global Covered Bond isintended to be a NGCB, details of such further Covered Bonds may be entered in therecords of the relevant Clearing Systems such that the principal amount of CoveredBonds represented by this Permanent Global Covered Bond may be increased by theamount of such further Covered Bonds so issued; or
(ii) if the applicable Final Terms indicate that this Permanent Global Covered Bond is notintended to be a NGCB, details of such further Covered Bonds may be entered by or onbehalf of the Issuer in Schedule Two hereto and the recording of such exchange or theissue of an additional Tranche shall be signed by or on behalf of the Issuer, whereuponthe principal amount of the Covered Bonds represented by this Permanent GlobalCovered Bond shall be increased by the principal amount of any such Temporary GlobalCovered Bond so exchanged or any new Tranche so issued.
This Global Covered Bond may be exchanged (free of charge) in whole, but not in part, forBearer Definitive Covered Bonds and (if applicable) Receipts, Coupons and/or Talons in orsubstantially in the forms set out in Parts 3, 4, 5 and 6 of Schedule 2 to the Trust Deed (on thebasis that all the appropriate details have been included on the face of such Bearer DefinitiveCovered Bonds and (if applicable) Receipts, Coupons and/or Talons and the relevant informationsupplementing, replacing or modifying the Conditions appearing in the Final Terms has beenendorsed on or attached to such Bearer Definitive Covered Bonds) either, as specified in theapplicable Final Terms:
(i) upon not less than 60 days’ written notice being given to the Issuing and Paying Agent byEuroclear Bank S.A./N.Y. (“Euroclear”) and/or Clearstream Banking, Société anonyme(“Clearstream, Luxembourg”) acting on the instructions of any holder of an interest in thisGlobal Covered Bond); or
(ii) upon the occurrence of an Exchange Event.
An “Exchange Event” means:
1. the Issuer has been notified that both Euroclear and Clearstream, Luxembourg have beenclosed for business for a continuous period of 14 days (other than by reason of holiday, statutoryor otherwise) or have announced an intention permanently to cease business or have in fact doneso and no successor clearing system is available; or
2. the Issuer has or will become subject to adverse tax consequences which would not besuffered were the Covered Bonds in definitive form and a certificate to such effect from twoAuthorized Signatories of the Issuer has been given to the Bond Trustee.
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If this Global Covered Bond is exchangeable following the occurrence of an Exchange Event:
the Issuer will promptly give notice to Covered Bondholders in accordance with Condition 14(Notices) upon the occurrence of such Exchange Event; and
Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any holder of aninterest in this Global Covered Bond) may give notice to the Issuing and Paying Agentrequesting exchange.
Any such exchange shall occur on a date specified in the notice not more than 45 days after thedate of receipt of the first relevant notice by the Issuing and Paying Agent.
The first notice requesting exchange in accordance with the above provisions shall give rise tothe issue of Bearer Definitive Covered Bonds for the Principal Amount Outstanding of CoveredBonds represented by this Global Covered Bond.
Any such exchange as aforesaid will be made upon presentation of this Global Covered Bond bythe bearer hereof on any Business Day in London at the office of the Issuing and Paying Agentspecified above.
The aggregate Principal Amount Outstanding of Bearer Definitive Covered Bonds issued uponan exchange of this Global Covered Bond will be equal to the aggregate Principal AmountOutstanding of this Global Covered Bond. Upon exchange of this Global Covered Bond forBearer Definitive Covered Bonds, the Issuing and Paying Agent shall cancel it or procure that itis cancelled.
Until the exchange of the whole of this Global Covered Bond as aforesaid, the bearer hereofshall (subject as provided in the next paragraph) in all respects be entitled to the same benefits asif he were the bearer of Bearer Definitive Covered Bonds and the relative Receipts, Couponsand/or Talons (if any) in the form(s) set out in Parts 3, 4, 5 and 6 (as applicable) of Schedule 2 tothe Trust Deed.
Each person (other than Euroclear or Clearstream, Luxembourg) who is for the time being shownin the records of Euroclear or Clearstream, Luxembourg as the holder of a particular principalamount of the Covered Bonds represented by this Global Covered Bond (in which regard anycertificate or other document issued by Euroclear or Clearstream, Luxembourg as to the principalamount of such Covered Bonds standing to the account of any person shall be conclusive andbinding for all purposes save in the case of manifest error) shall be treated by the Issuer, theGuarantor, the Bond Trustee, the Issuing and Paying Agent and any other Paying Agent as theholder of such principal amount of such Covered Bonds for all purposes other than with respectto the payment of principal and interest on such principal amount of such Covered Bonds, theright to which shall be vested, as against the Issuer and the Guarantor, solely in the bearer of thisGlobal Covered Bond in accordance with and subject to the terms of this Global Covered Bondand the Trust Deed.
For the purposes of disclosure pursuant to the Interest Act (Canada) and not for any otherpurpose, where in any Covered Bond (i) a rate of interest is to be calculated on the basis of a year
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of 360 days, the yearly rate of interest to which the 360 day rate is equivalent is such ratemultiplied by the number of days in the year for which such calculation is made and divided by360, or (ii) a rate of interest is to be calculated during a leap year, the yearly rate of interest towhich such rate is equivalent is such rate multiplied by 366 and divided by 365.
This Global Covered Bond is governed by, and shall be construed in accordance with, the lawsof the Province of Ontario and the federal laws of Canada applicable therein.
This Global Covered Bond shall not be valid unless authenticated by The Bank of New YorkMellon, London Branch, as Issuing and Paying Agent and, if the Final Terms indicate that thisGlobal Covered Bond is intended to be held in a manner which would allow Eurosystemeligibility, effectuated by the entity appointed as common safekeeper by the relevant ClearingSystems.
IN WITNESS whereof the Issuer has caused this Global Covered Bond to be signed manually orin facsimile by a person duly authorized on its behalf.
Issued as of [ ].
National Bank of Canada
By: By:Duly Authorized Duly Authorized
Authenticated by:
The Bank of New York Mellon, LondonBranchas Issuing and Paying Agent without recourse, warranty or liability
By:Authorized Officer
Effectuated without recourse,warranty or liability8
as Common Safekeeper
By:
8 Common Safekeeper to effectuate only where the Final Terms indicate that the Global Covered Bond is intendedto be a NGCB.
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Schedule One
PART I
INTEREST PAYMENTS
Date madeInterestPayment Date
Total amount ofinterest payable
Amount ofinterest paid
Confirmation ofpayment by oron behalf of theIssuer
Schedule One should only be completed where the Final Terms indicate that the Global Covered Bond isnot intended to be a NGCB
MT DOCS 12391588v6
PART II
PAYMENT OF INSTALMENT AMOUNTS
Date made
Total amount ofInstalmentAmountspayable
Amount ofInstalmentAmounts paid
RemainingPrincipalAmountOutstanding ofthis GlobalCovered Bondfollowing suchpayment9
Confirmation ofpayment by oron behalf of theIssuer
9 See most recent entry in Part II, III or IV or Schedule Two in order to determine this amount.
MT DOCS 12391588v6
PART III
REDEMPTIONS
Date made
Total amount ofprincipalpayable
Amount ofprincipal paid(whether incash or bydelivery ofassets)
RemainingPrincipalAmountOutstanding ofthis GlobalCovered Bondfollowing suchredemption10
Confirmation ofpayment by oron behalf of theIssuer
10 See most recent entry in Part II, III or IV or Schedule Two in order to determine this amount.
MT DOCS 12391588v6
PART IV
PURCHASES AND CANCELLATIONS
Date made
Part of thePrincipal AmountOutstanding of thisGlobal CoveredBond purchasedand cancelled
RemainingPrincipal AmountOutstanding ofthis GlobalCovered Bondfollowing suchredemption11
Confirmation ofpurchase andcancellation byor on behalf ofthe Issuer
11 See most recent entry in Part II, III or IV or Schedule Two in order to determine this amount.
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Schedule Two*
EXCHANGES AND NEW TRANCHES
The following exchanges of a part of this Global Covered Bond for Bearer Definitive CoveredBonds or issues of additional Tranches not originally represented by a Temporary GlobalCovered Bond (“New Issues”) a part of a Permanent Global Covered Bond have been made:
Date made
Principal AmountOutstanding of thisGlobal CoveredBond exchangedfor DefinitiveCovered Bonds orPrepaid Amount ofNew Issues
RemainingPrincipal AmountOutstanding ofthis GlobalCovered Bondfollowing suchexchange or NewIssues12
Notation madeby or on behalfof the Issuer
* Schedule Two should only be completed where the Final Terms indicate that the Global Covered Bond isnot intended to be a NGCB
12 See most recent entry in Part II, III or IV of Schedule One or in this Schedule Two in order to determinethis amount.
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PART 3FORM OF BEARER DEFINITIVE COVERED BOND
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BESUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS,INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OFTHE INTERNAL REVENUE CODE.]13
THIS SECURITY AND ANY GUARANTEE IN RESPECT THEREOF HAS NOT BEENAND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, ASAMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE U.S. STATESECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLDWITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE AGENCY AGREEMENT INRESPECT OF THIS SECURITY (THE “AGENCY AGREEMENT”) AND PURSUANTTO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT ORPURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THESECURITIES ACT.
National Bank of Canada(the “Issuer”)
(a Canadian chartered Bank)
[Specified Currency and aggregate nominal amount of Tranche]COVERED BONDS DUE
[Year of Maturity]
unconditionally and irrevocably guaranteed as to payments of interest and principal by
NBC Covered Bond (Legislative) Guarantor Limited Partnership(established under the Limited Partnerships Act (Ontario))
(the “Guarantor”)
This Covered Bond is one of a Series of Covered Bonds of [Specified Currency(ies) andSpecified Denomination(s)] each of the Issuer (“Covered Bonds”). References herein to theConditions shall be to the Terms and Conditions [endorsed hereon/set out in Schedule 1 to theTrust Deed (as defined below) which shall be incorporated by reference herein and have effect asif set out herein] as supplemented, replaced and modified by the relevant information appearingin the Final Terms (the “Final Terms”) endorsed hereon but, in the event of any conflictbetween the provisions of the said Conditions and such information in the Final Terms, suchinformation will prevail.
13 Delete where the original maturity of the Covered Bonds is 1 year or less.
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Words and expressions defined in the Conditions shall bear the same meanings when used in thisCovered Bond.
This Covered Bond is issued subject to, and with the benefit of, the Conditions and a Trust Deed(such Trust Deed as modified and/or supplemented and/or restated from time to time, the “TrustDeed”) dated October 31, 2013 made between the Issuer, the Guarantor and ComputershareTrust Company of Canada, as Bond Trustee, for, inter alios, the Covered Bondholders.
For value received, the Issuer, subject to and in accordance with the Conditions and the TrustDeed, promises to pay to the bearer hereof on [each Instalment Date and] the Final Maturity Dateor on such earlier date as this Covered Bond may become due and repayable in accordance withthe Conditions and the Trust Deed, the amount payable on redemption of this Covered Bond andto pay interest (if any) on the Principal Amount Outstanding of this Covered Bond calculated andpayable as provided in the Conditions and the Trust Deed together with any other sums payableunder the Conditions and the Trust Deed.
For the purposes of disclosure pursuant to the Interest Act (Canada) and not for any otherpurpose, where in any Covered Bond (i) a rate of interest is to be calculated on the basis of a yearof 360 days, the yearly rate of interest to which the 360 day rate is equivalent is such ratemultiplied by the number of days in the year for which such calculation is made and divided by360, or (ii) a rate of interest is to be calculated during a leap year, the yearly rate of interest towhich such rate is equivalent is such rate multiplied by 366 and divided by 365.
This Covered Bond shall not be valid unless authenticated by The Bank of New York Mellon,London Branch, as Issuing and Paying Agent.
IN WITNESS whereof this Covered Bond has been executed on behalf of the Issuer.
Issued as of [ ].
National Bank of Canada
By: By:Duly Authorized Duly Authorized
Authenticated by:
The Bank of New York Mellon, LondonBranchas Issuing and Paying Agent without recourse, warranty or liability.
By:Authorized Officer
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3
[CONDITIONS]
[Conditions to be as set out in Schedule 1 to this Trust Deed or such other form as may be agreedbetween the Issuer, the Issuing and Paying Agent, the Bond Trustee and the relevant Dealer(s),but shall not be endorsed if not required by the relevant Stock Exchange]
[At the foot of the Conditions:]
ISSUING AND PAYING AGENT, TRANSFER AGENT AND EXCHANGE AGENT
The Bank of New York Mellon, London BranchOne Canada Square, 48th Floor
London E14 4AL
EUROPEAN REGISTRAR AND TRANSFER AGENT
The Bank of New York Mellon (Luxembourg) S.A.Vertigo Building – Polaris2-4 rue Eugene Ruppert
L-2453 LuxembourgR.C. Luxembourg No. B 67.654
U.S. REGISTRAR, TRANSFER AGENT AND EXCHANGE AGENT
The Bank of New York Mellon101 Barclay Street, 7th Floor East
New York, New York 10286
and/or such other or further Issuing and Paying Agent or Paying Agent and/or specified officesas may from time to time be duly appointed by the Issuer and the Guarantor and notice of whichhas been given to the Covered Bondholders.
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FINAL TERMS
[Here to be set out the text of the relevant information supplementing, replacing or modifying theConditions which appears in the Final Terms relating to the Covered Bonds]
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PART 4FORM OF RECEIPT
[Face of Receipt]
National Bank of Canada(the “Issuer”)
(a Canadian chartered Bank)
[Specified Currency and aggregate nominal amount of Tranche]COVERED BONDS DUE
[Year of Maturity]
unconditionally and irrevocably guaranteed as to payments of interest and principal by
NBC Covered Bond (Legislative) Guarantor Limited Partnership(established under the Limited Partnerships Act (Ontario))
(the “Guarantor”)
Series No. [ ]
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BESUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS,INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OFTHE INTERNAL REVENUE CODE.]14
Receipt for the sum of [ ] being the instalment of principal payable in accordance with the Termsand Conditions applicable to the Covered Bond to which this Receipt appertains (the“Conditions”) on [ ].
This Receipt is issued subject to and in accordance with the Conditions which shall be bindingupon the holder of this Receipt (whether or not it is for the time being attached to such CoveredBond) and is payable at the specified office of any of the Paying Agents set out on the reversehereof (and/or any other or further Paying Agents and/or specified offices as may from time totime be duly appointed and notified to the Covered Bondholders).
This Receipt must be presented for payment together with the Covered Bond to which itappertains. The Issuer shall have no obligation in respect of any Receipt presented without theCovered Bond to which it appertains or any unmatured Receipts.
14 Delete where the original maturity of the Covered Bonds is 1 year or less.
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PART 5FORM OF COUPON
[Face of Coupon]
National Bank of Canada(the “Issuer”)
(a Canadian chartered Bank)
[Specified Currency and aggregate nominal amount of Tranche]COVERED BONDS DUE
[Year of Maturity]
unconditionally and irrevocably guaranteed as to payments of interest and principal by
NBC Covered Bond (Legislative) Guarantor Limited Partnership(established under the Limited Partnerships Act (Ontario))
(the “Guarantor”)
Series No. [ ]
[Coupon appertaining to a Covered Bond in the denomination of [Specified Currency andSpecified Denomination]].15
Part A[For Fixed Rate Covered Bonds:This Coupon is payable to bearer, Coupon forseparately negotiable and subject to the [ ]Conditions of the said Covered Bonds. due on [ ], [ ]]
15 Delete where the Covered Bonds are all of the same denomination.
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Part B
[For Floating Rate Covered Bonds:
Coupon for the amount due in accordance with the Conditions endorsed on, attached to orincorporated by reference into the said Covered Bonds on [the Interest Payment Date falling in[ ] [ ]/[ ]].
This Coupon is payable to bearer, separately negotiable and subject to such Conditions, underwhich it may become void before its due date.]
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BESUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS,INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OFTHE INTERNAL REVENUE CODE.]16
16 Delete where the original maturity of the Covered Bonds is 1 year or less.
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PART 6FORM OF TALON
[Face of Talon]
National Bank of Canada(the “Issuer”)
(a Canadian chartered Bank)
[Specified Currency and aggregate nominal amount of Tranche]COVERED BONDS DUE
[Year of Maturity]
unconditionally and irrevocably guaranteed as to payments of interest and principal by
NBC Covered Bond (Legislative) Guarantor Limited Partnership(established under the Limited Partnerships Act (Ontario))
(the “Guarantor”)
Series No. [ ]
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BESUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS,INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OFTHE INTERNAL REVENUE CODE.]17
[Talon appertaining to a Covered Bond in the denomination of [Specified Currency andSpecified Denomination]]18
On and after [ ] further Coupons [and a further Talon]19 appertaining to the Covered Bond towhich this Talon appertains will be issued at the specified office of any of the Paying Agents setout on the reverse hereof (and/or any other or further Paying Agents and/or specified offices asmay from time to time be duly appointed and notified to the Covered Bondholders) uponproduction and surrender of this Talon.
This Talon may, in certain circumstances, become void under the Conditions endorsed on theCovered Bond to which this Talon appertains.
17 Delete where the original maturity of the Covered Bonds is 1 year or less.18 Delete where the Covered Bonds are all of the same denomination.19 Not required on last Coupon sheet.
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[Reverse of Receipts, Coupons and Talons]
ISSUING AND PAYING AGENT
The Bank of New York Mellon, London BranchOne Canada Square, 48th Floor
London E14 4AL
PAYING AGENTS
The Bank of New York Mellon, London BranchOne Canada Square, 48th Floor
London E14 4AL
The Bank of New York Mellon101 Barclay Street, 7th Floor East
New York, New York 10286
and/or such other or further Issuing and Paying Agent or Paying Agent and/or specified officesas may from time to time be duly appointed by the Issuer and the Guarantor and notice of whichhas been given to the Covered Bondholders.
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PART 7FORM OF CERTIFICATE TO BE PRESENTED BY EUROCLEAR OR
CLEARSTREAM, LUXEMBOURG
National Bank of Canada(the “Issuer”)
(a Canadian chartered Bank)
[Title of Covered Bonds](the “Securities”)
This is to certify that, based solely on certifications we have received in writing, by tested telexor by electronic transmission from member organisations appearing in our records as personsbeing entitled to a portion of the nominal amount set forth below (our “MemberOrganisations”) substantially to the effect set forth in the temporary Global Covered Bondrepresenting the Securities, as of the date hereof, [ ] principal amount of the above captionedSecurities (i) is owned by persons that are not citizens or residents of the United States,partnerships, corporations or other entities created or organised under the laws of the UnitedStates or any estate the income of which is subject to United States Federal income taxationregardless of its source or any trust if a court within the United States is able to exercise primarysupervision over the administration of the trust and one or more United States persons have theauthority to control all substantial decisions of the trust (“United States persons”), (ii) is ownedby United States persons that (a) are foreign branches of United States financial institutions (asdefined in U.S. Treasury Regulations Sections 1.165-12(c)(1)(iv)) (“financial institutions”)purchasing for their own account or for resale, or (b) acquired the Securities through foreignbranches of United States financial institutions and who hold the Securities through such UnitedStates financial institutions on the date hereof (and in either case (a) or (b), each such UnitedStates financial institution has agreed, on its own behalf or through its agent, that we may advisethe Issuer or the Issuer’s agent that it will comply with the requirements of Section 165(j)(3)(A),(B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or(iii) is owned by United States or foreign financial institutions for purposes of resale during therestricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and tothe further effect that United States or foreign financial institutions described in Clause (iii)above (whether or not also described in Clause (i) or (ii)) have certified that they have notacquired the Securities for purposes of resale directly or indirectly to a United States person or toa person within the United States or its possessions.
If the Securities are of the category contemplated in Section 230.903(c)(3) of Regulation S underthe Securities Act of 1933, as amended, then this is also to certify with respect to such principalamount of Securities set forth above that, except as set forth below, we have received in writing,by tested telex or by electronic transmission, from our Member Organisations entitled to aportion of such principal amount, certifications with respect to such portion, substantially to theeffect set forth in the temporary Global Covered Bond representing the Securities.
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As used herein, “United States” means the United States of America (including the States andthe District of Columbia); and its “possessions” include Puerto Rico, the U.S. Virgin Islands,Guam, American Samoa, Wake Island and the Northern Mariana Islands.
We further certify (i) that we are not making available herewith for exchange (or, if relevant,exercise of any rights or collection of any interest) any portion of the temporary Global CoveredBond excepted in such certifications and (ii) that as of the date hereof we have not received anynotification from any of our Member Organisations to the effect that the statements made bysuch Member Organisations with respect to any portion of the part submitted herewith forexchange (or, if relevant, exercise of any rights or collection of any interest) are no longer trueand cannot be relied upon as of the date hereof.
We will retain, as required, all certificates received from Member Organisations for the periodspecified in U.S. Treasury Regulation Section 1.163-5(c)(2)(i)(D)(3)(i).
We understand that this certification is required in connection with certain tax laws and, ifapplicable, certain securities laws of the United States. In connection therewith, if administrativeor legal proceedings or official enquiries are commenced or threatened in connection with whichthis certification is or would be relevant, we irrevocably authorise you to produce thiscertification to any interested party in such proceedings or enquiries.
Dated20:
Yours faithfully,
Euroclear Bank S.A./N.V.
or
Clearstream Banking, société anonyme
By: ____________________________
20 To be dated no earlier than the fifteenth day prior to the date to which this certification relates, namely (a)the payment date or (b) the Exchange Date.
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CERTIFICATE “A”
National Bank of Canada(the “Issuer”)
(a Canadian chartered Bank)
[Title of Covered Bonds]
(the “Securities”)
This is to certify that as of the date hereof, and except as set forth below, the above captionedSecurities held by you for our account (i) are owned by person(s) that are not citizens orresidents of the United States, partnerships, corporations or other entities created or organisedunder the laws of the United States or any estate the income of which is subject to United StatesFederal income taxation regardless of its source or any trust if a court within the United States isable to exercise primary supervision over the administration of the trust and one or more UnitedStates persons have the authority to control all substantial decisions of the trust (“United Statesperson(s)”), (ii) are owned by United States person(s) that (a) are foreign branches of UnitedStates financial institutions (as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(iv))(“financial institutions”) purchasing for their own account or for resale, or (b) acquired theSecurities through foreign branches of United States financial institutions and who hold theSecurities through such United States financial institutions on the date hereof (and in either case(a) or (b), each such United States financial institution hereby agrees, on its own behalf orthrough its agent, that you may advise the Issuer or the Issuer’s agent that it will comply with therequirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, asamended, and the regulations thereunder), or (iii) are owned by United States or foreign financialinstitution(s) for purposes of resale during the restricted period (as defined in U.S. TreasuryRegulations Section 1.163-5(c)(2)(i)(D)(7)), and in addition if the owner of the Securities is aUnited States or foreign financial institution described in Clause (iii) above (whether or not alsodescribed in Clause (i) or (ii)) this is to further certify that such financial institution has notacquired the Securities for purposes of resale directly or indirectly to a United States person or toa person within the United States or its possessions.
If the Securities are of the category contemplated in Section 230.903(c)(2) of Regulation S underthe Securities Act of 1933, as amended, (the “Act”) then this is also to certify that, except as setforth below, the Securities are beneficially owned by (a) non U.S. person(s) or (b) U.S. person(s)who purchased the Securities in transactions which did not require registration under the Act. Asused in this paragraph, the term “U.S. person” has the meaning given to it by Regulation S underthe Act.
As used herein, “United States” means the United States of America (including the States andthe District of Columbia); and its “possessions” include Puerto Rico, the U.S. Virgin Islands,Guam, American Samoa, Wake Island and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the date on which you intendto submit your certification relating to the Securities held by you for our account in accordancewith your operating procedures if any applicable statement herein is not correct on such date, and
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in the absence of any such notification it may be assumed that this certification applies as of suchdate.
This certification excepts and does not relate to [ ] of such interest in the above Securities inrespect of which we are not able to certify and as to which we understand exchange and deliveryof definitive Securities (or, if relevant, exercise of any right or collection of any interest) cannotbe made until we do so certify.
We understand that this certification is required in connection with certain tax laws and, ifapplicable, certain securities laws of the United States. In connection therewith, if administrativeor legal proceedings or official enquiries are commenced or threatened in connection with whichthis certification is or would be relevant, we irrevocably authorise you to produce thiscertification to any interested party in such proceedings or enquiries.
Dated21:
Name of person making certification
By: ___________________________
21 To be dated no earlier than the fifteenth day prior to which this certification relates, namely (a) the paymentdate or (b) the Exchange Date.
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SCHEDULE 3FORMS OF REGISTERED GLOBAL AND DEFINITIVE COVERED BONDS
PART 1FORM OF REGULATION S GLOBAL COVERED BOND
Series Number: CUSIP:Common Code:ISIN No.:Certificate No.:Serial Number:
THIS SECURITY AND ANY GUARANTEE IN RESPECT THEREOF HAS NOT BEENAND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, ASAMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE U.S. STATESECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLDWITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE AGENCY AGREEMENT INRESPECT OF THIS SECURITY (THE “AGENCY AGREEMENT”) AND PURSUANTTO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT ORPURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THESECURITIES ACT. UNTIL THE EXPIRY OF THE PERIOD OF 40 DAYS AFTER THECOMPLETION OF THE DISTRIBUTION OF ALL THE SECURITIES OF THETRANCHE OF WHICH THIS SECURITY FORMS PART, SALES MAY NOT BEMADE IN THE UNITED STATES OR TO U.S. PERSONS UNLESS MADE (I)PURSUANT TO RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIESACT OR (II) TO QUALIFIED INSTITUTIONAL BUYERS AS DEFINED IN, AND INTRANSACTIONS PURSUANT TO, RULE 144A UNDER THE SECURITIES ACT.
BY ITS PURCHASE AND HOLDING OF THIS SECURITY (OR ANY INTERESTHEREIN), THE PURCHASER OR HOLDER WILL BE DEEMED TO HAVEREPRESENTED AND AGREED THAT EITHER (A) IT IS NOT AND FOR SO LONGAS IT HOLDS THIS SECURITY (OR ANY INTEREST HEREIN) WILL NOT BE (I) AN“EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE U.S.EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED(“ERISA”) THAT IS SUBJECT TO TITLE I OF ERISA, (II) A “PLAN” AS DEFINED INAND SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF1986, AS AMENDED (THE “CODE”), (III) AN ENTITY WHOSE UNDERLYINGASSETS INCLUDE THE ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLANSUBJECT TO ERISA OR OTHER PLAN SUBJECT TO SECTION 4975 OF THE CODE,OR (IV) A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER EMPLOYEEBENEFIT PLAN WHICH IS SUBJECT TO ANY U.S. FEDERAL, STATE, LOCAL ORNON-U.S. LAW, THAT IS SUBSTANTIALLY SIMILAR TO THE PROVISIONS OFSECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR (B) ITSACQUISITION AND HOLDING OF THIS SECURITY WILL NOT RESULT IN A
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PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975OF THE CODE OR, IN THE CASE OF SUCH A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER EMPLOYEE BENEFIT PLAN, ANY SUCH SUBSTANTIALLYSIMILAR U.S. FEDERAL, STATE, LOCAL OR NON-U.S. LAW FOR WHICH ANEXEMPTION IS NOT AVAILABLE.
[If this Covered Bond is registered in the name of Cede & Co. (or such other person as may benominated by The Depository Trust Company (“DTC”) for the purpose) (collectively, “Cede &Co.”) as nominee for DTC, then, unless this Covered Bond is presented by an authorisedrepresentative of DTC to the Issuer (as defined below) or its agent for registration of transfer,exchange or payment, and any Covered Bond issued is registered in the name of Cede & Co. orsuch other name as is requested by an authorised representative of DTC (and any payment ismade to Cede & Co. or to such other entity as is requested by an authorised representative ofDTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OROTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered ownerhereof, Cede & Co. or other nominee has an interest herein.
Unless and until it is exchanged in whole for securities in definitive registered form, this notemay not be transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTCto DTC or another nominee of DTC or by DTC or any such nominee to a successor depository ora nominee of such successor depository.]22
National Bank of Canada(the “Issuer”)
(a Canadian chartered Bank)
REGULATION S GLOBAL COVERED BOND
and
unconditionally and irrevocably guaranteed as to payments of interest and principal by
NBC Covered Bond (Legislative) Guarantor Limited Partnership(established under the Limited Partnerships Act (Ontario))
(the “Guarantor”)
The Issuer hereby certifies that ___________________ is, at the date hereof, entered in theRegister as the holder of the aggregate nominal amount of ___________________ of a dulyauthorized issue of Covered Bonds of the Issuer (the “Covered Bonds”) of the aggregatenominal amount, Specified Currency(ies) and Specified Denomination(s) as are specified in theFinal Terms applicable to the Covered Bonds (the “Final Terms”), a copy of which is annexedhereto. References herein to the Conditions shall be to the Terms and Conditions of the CoveredBonds as set out in Schedule 1 to the Trust Deed (as defined below) as supplemented, replacedand modified by the Final Terms but, in the event of any conflict between the provisions of thesaid Conditions and the information in the Final Terms, the Final Terms will prevail.
22 Delete if not deposited with DTC.
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Words and expressions defined in the Conditions shall bear the same meanings when used in thisGlobal Covered Bond.
This Global Covered Bond is issued subject to, and with the benefit of, the Conditions and aTrust Deed (such Trust Deed as modified and/or supplemented and/or restated from time to time,the “Trust Deed”) dated October 31, 2013 made between the Issuer, the Guarantor andComputershare Trust Company of Canada, as Bond Trustee, for, inter alios, the CoveredBondholders.
For value received, the Issuer, subject to and in accordance with the Conditions and the TrustDeed, promises to pay to such registered holder on each Instalment Date (if the Covered Bondsare repayable in instalments) and on the Final Maturity Date and/or on such earlier date(s) as allor any of the Covered Bonds represented by this Global Covered Bond may become due andrepayable in accordance with the Conditions and the Trust Deed, the amount payable under theConditions in respect of such Covered Bonds on each such date and to pay interest (if any) on thePrincipal Amount Outstanding of the Covered Bonds from time to time represented by thisGlobal Covered Bond calculated and payable as provided in the Conditions and the Trust Deedtogether with any other sums payable under the Conditions and the Trust Deed, uponpresentation and, at maturity, surrender of this Global Covered Bond at the specified office of theRegistrar as specified in the Final Terms.
On any redemption or payment of an instalment or interest being made in respect of, or purchaseand cancellation of, any of the Covered Bonds represented by this Global Covered Bond detailsof such redemption, payment, purchase and cancellation (as the case may be) shall be entered byor on behalf of the Issuer in the Register. Upon any such redemption, payment of an instalment,purchase and cancellation the nominal amount of this Global Covered Bond and the CoveredBonds represented by this Global Covered Bond shall be reduced by the Principal AmountOutstanding of such Covered Bonds so redeemed or purchased and cancelled or the amount ofsuch instalment. The Principal Amount Outstanding from time to time of this Global CoveredBond and of the Covered Bonds represented by this Global Covered Bond following any suchredemption, payment of an instalment, purchase and cancellation as aforesaid or any exchange asreferred to below shall be the Principal Amount Outstanding most recently entered in theRegister.
This Global Covered Bond may be exchanged (free of charge) in whole, but not in part, forRegistered Definitive Covered Bonds without Receipts, Coupons and/or Talons attached (on thebasis that all the appropriate details have been included on the face of such Registered DefinitiveCovered Bonds and the relevant information supplementing, replacing or modifying theConditions appearing in the Final Terms has been endorsed on or attached to such RegisteredDefinitive Bearer Covered Bonds) either, as specified in the applicable Final Terms:
(i) upon not less than 60 days’ written notice being given to the Registrar by Euroclear BankS.A./N.Y. (“Euroclear”) and/or Clearstream Banking, Société anonyme (“Clearstream,Luxembourg”) acting on the instructions of any holder of an interest in this Global CoveredBond); or
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(ii) upon the occurrence of an Exchange Event.
An “Exchange Event” means:
1. in the case of Covered Bonds registered in the name of a nominee for a commondepositary for Euroclear and Clearstream, Luxembourg, the Issuer has been notified that bothEuroclear and Clearstream, Luxembourg have been closed for business for a continuous periodof 14 days (other than by reason of holiday, statutory or otherwise) or have announced anintention permanently to cease business or have in fact done so and no successor clearing systemis available; or
2. in the case of Covered Bonds registered in the name of a nominee for DTC, either theDepository Trust Company (“DTC”) has notified the Issuer that it is unwilling or unable tocontinue to act as depositary for the Covered Bonds and no alternative clearing system isavailable or DTC has ceased to constitute a clearing agency registered under the Exchange Act;or
3. the Issuer has or will become subject to adverse tax consequences which would not besuffered were the Covered Bonds in definitive form and a certificate to such effect from twoAuthorized Signatories of the Issuer has been given to the Bond Trustee.
If this Global Covered Bond is exchangeable following the occurrence of an Exchange Event:
the Issuer will promptly give notice to Covered Bondholders in accordance with Condition 14(Notices) upon the occurrence of such Exchange Event; and
DTC, Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any holder of aninterest in this Global Covered Bond) may give notice to the Registrar requesting exchange and,in the event of the occurrence of an Exchange Event as described in (2) above, the Issuer mayalso give notice to the Registrar requesting exchange.
Any such exchange shall occur on a date specified in the notice not more than 10 days after thedate of receipt of the first relevant notice by the Registrar.
The first notice requesting exchange in accordance with the above provisions shall give rise tothe issue of Registered Definitive Covered Bonds for the Principal Amount Outstanding ofCovered Bonds represented by this Global Covered Bond.
Registered Definitive Covered Bonds will be issued in the minimum denominations specified inthe Final Terms.
Any such exchange as aforesaid will be made upon presentation of this Global Covered Bond bythe registered holder at the office of the Registrar on any Business Day in the place ofpresentation.
Covered Bonds represented by this Global Covered Bond are transferable only in accordancewith, and subject to, the provisions hereof and the Agency Agreement dated October 31, 2013
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(as amended and/or supplemented and/or restated from time to time) and the rules and operatingprocedures of Euroclear and Clearstream, Luxembourg and DTC.
On any exchange or transfer as aforesaid pursuant to which either (i) Covered Bonds representedby this Global Covered Bond are no longer so represented or (ii) if Covered Bonds not sorepresented are to be so represented details of such exchange or transfer shall be entered by or onbehalf of the Issuer in the Register, whereupon the nominal amount of this Global Covered Bondand the Covered Bonds held by the registered holder hereof shall be increased or reduced (as thecase may be) by the nominal amount so exchanged or transferred.
Until the exchange of the whole of this Global Covered Bond as aforesaid, the registered holderhereof shall (subject as provided in the next paragraph) in all respects be entitled to the samebenefits as if he were the registered holder of Registered Definitive Covered Bonds in theform(s) set out in Part A or B (as applicable) of Part 3 of Schedule 3 to the Trust Deed.
In the case of Covered Bonds registered in the name of a nominee of a common depositary forEuroclear and Clearstream, Luxembourg, each person (other than Euroclear or Clearstream,Luxembourg) who is for the time being shown in the records of Euroclear or Clearstream,Luxembourg as the holder of a particular principal amount of the Covered Bonds represented bythis Global Covered Bond (in which regard any certificate or other document issued by Euroclearor Clearstream, Luxembourg as to the principal amount of such Covered Bonds standing to theaccount of any person shall be conclusive and binding for all purposes save in the case ofmanifest error) shall be treated by the Issuer, the Guarantor, the Bond Trustee, the Registrar andany other Transfer Agent as the holder of such principal amount of such Covered Bonds for allpurposes other than with respect to the payment of principal and interest on such principalamount of such Covered Bonds, the right to which shall be vested, as against the Issuer and theGuarantor, solely in the registered holder of this Global Covered Bond in accordance with andsubject to the terms of this Global Covered Bond and the Trust Deed.
Subject as provided in the Trust Deed, each person who is for the time being shown in therecords of DTC as entitled to a particular nominal amount of the Covered Bonds represented bythis Global Covered Bond (in which regard any certificate or other document issued by DTC asto the nominal amount of such Covered Bonds standing to the account of any person shall beconclusive and binding for all purposes save in the case of manifest error) shall be deemed to bethe holder of such nominal amount of such Covered Bonds for all purposes other than withrespect of payments on, and voting, giving consents and making requests in respect of, suchnominal amount of such Covered Bonds for which purpose the registered holder of this GlobalCovered Bond shall be deemed to be the holder of such nominal amount of the Covered Bonds inaccordance with and subject to the terms of this Global Covered Bond and the Trust Deed.
For the purposes of disclosure pursuant to the Interest Act (Canada) and not for any otherpurpose, where in any Covered Bond (i) a rate of interest is to be calculated on the basis of a yearof 360 days, the yearly rate of interest to which the 360 day rate is equivalent is such ratemultiplied by the number of days in the year of which such calculation is made and divided by360, or (ii) a rate of interest is to be calculated during a leap year, the yearly rate of interest towhich such rate is equivalent is such rate multiplied by 366 and divided by 365.
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This Global Covered Bond is governed by, and shall be construed in accordance with, the lawsof the Province of Ontario and the federal laws of Canada applicable therein.
This Global Covered Bond shall not be valid unless authenticated by the Registrar specified inthe Final Terms.
IN WITNESS whereof the Issuer has caused this Global Covered Bond to be signed manually orin facsimile by persons duly authorized on its behalf.
Issued as of [ ].
National Bank of Canada
By: By:Duly Authorized Duly Authorized
Authenticated by one of the following:
[The Bank of New York Mellon (Luxembourg) S.A. / The Bank of New York Mellon]
as Registrar without recourse, warranty or liability.
By:Authorized Officer
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PART 2FORM OF RULE 144A GLOBAL COVERED BOND
Series Number: CUSIP:Common Code:ISIN No.:Certificate No.:Serial Number:
THIS SECURITY AND ANY GUARANTEE IN RESPECT THEREOF HAS NOT BEENAND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, ASAMENDED (THE “SECURITIES ACT”), OR ANY OTHER APPLICABLE U.S. STATESECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLDWITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITSACQUISITION HEREOF, THE HOLDER (A) REPRESENTS THAT IT IS A“QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THESECURITIES ACT) PURCHASING THE SECURITY FOR ITS OWN ACCOUNT ORFOR THE ACCOUNT OF ONE OR MORE QUALIFIED INSTITUTIONAL BUYERS;(B) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THESECURITY EXCEPT IN ACCORDANCE WITH THE AGENCY AGREEMENT INRESPECT OF THIS SECURITY (THE “AGENCY AGREEMENT”) AND, PRIOR TOTHE DATE WHICH IS ONE YEAR AFTER THE LATER OF THE LAST ISSUE DATEFOR THE SERIES AND THE LAST DATE ON WHICH THE ISSUER OR ANAFFILIATE OF THE ISSUER WAS THE OWNER OF SUCH SECURITY, OTHERTHAN (1) TO THE ISSUER OR ANY AFFILIATE THEREOF, (2) INSIDE THEUNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES ISA QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144AUNDER THE SECURITIES ACT PURCHASING THE SECURITY FOR ITS OWNACCOUNT OR FOR THE ACCOUNT OF ONE OR MORE QUALIFIEDINSTITUTIONAL BUYERS IN A TRANSACTION MEETING THE REQUIREMENTSOF RULE 144A, (3) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE903 OR RULE 904 UNDER THE SECURITIES ACT, (4) PURSUANT TO THEEXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THESECURITIES ACT (IF AVAILABLE) OR (5) PURSUANT TO AN EFFECTIVEREGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE INACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OFTHE UNITED STATES AND ANY OTHER JURISDICTION; AND (C) IT AGREESTHAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY ISTRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THIS SECURITY AND RELATED DOCUMENTATION (INCLUDING, WITHOUTLIMITATION, THE AGENCY AGREEMENT REFERRED TO HEREIN) MAY BEAMENDED OR SUPPLEMENTED FROM TIME TO TIME, WITHOUT THECONSENT OF, BUT UPON NOTICE TO, THE HOLDER OF SUCH SECURITY SENT
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TO ITS REGISTERED ADDRESS, TO MODIFY THE RESTRICTIONS ON ANDPROCEDURES FOR RESALES AND OTHER TRANSFERS OF THIS SECURITY TOREFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THEINTERPRETATION THEREOF) OR IN PRACTICES RELATING TO RESALES OROTHER TRANSFERS OF RESTRICTED SECURITIES GENERALLY. THE HOLDEROF THIS SECURITY SHALL BE DEEMED, BY ITS ACCEPTANCE OR PURCHASEHEREOF, TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT(EACH OF WHICH SHALL BE CONCLUSIVE AND BINDING ON THE HOLDERHEREOF AND ALL FUTURE HOLDERS OF THIS SECURITY AND ANYSECURITIES ISSUED IN EXCHANGE OR SUBSTITUTION THEREFOR, WHETHEROR NOT ANY NOTATION THEREOF IS MADE HEREON).
BY ITS PURCHASE AND HOLDING OF THIS SECURITY (OR ANY INTERESTHEREIN), THE PURCHASER OR HOLDER WILL BE DEEMED TO HAVEREPRESENTED AND AGREED THAT EITHER (A) IT IS NOT AND FOR SO LONGAS IT HOLDS THIS SECURITY (OR ANY INTEREST HEREIN) WILL NOT BE (I) AN“EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE U.S.EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED(“ERISA”) THAT IS SUBJECT TO TITLE I OF ERISA, (II) A “PLAN” AS DEFINED INAND SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF1986, AS AMENDED (THE “CODE”), (III) AN ENTITY WHOSE UNDERLYINGASSETS INCLUDE THE ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLANSUBJECT TO ERISA OR OTHER PLAN SUBJECT TO SECTION 4975 OF THE CODE,OR (IV) A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER EMPLOYEEBENEFIT PLAN WHICH IS SUBJECT TO ANY U.S. FEDERAL, STATE, LOCAL ORNON-U.S. LAW, THAT IS SUBSTANTIALLY SIMILAR TO THE PROVISIONS OFSECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, OR (B) ITSACQUISITION AND HOLDING OF THIS SECURITY WILL NOT RESULT IN APROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975OF THE CODE OR, IN THE CASE OF SUCH A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER EMPLOYEE BENEFIT PLAN, ANY SUCH SUBSTANTIALLYSIMILAR U.S. FEDERAL, STATE, LOCAL OR NON-U.S. LAW FOR WHICH ANEXEMPTION IS NOT AVAILABLE.
PROSPECTIVE PURCHASERS ARE HEREBY NOTIFIED THAT THE SELLER OFTHIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THEPROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE144A.
[If this Covered Bond is registered in the name of Cede & Co. (or such other person as may benominated by The Depository Trust Company (“DTC”) for the purpose) (collectively, “Cede &Co.”) as nominee for DTC, then, unless this Covered Bond is presented by an authorisedrepresentative of DTC to the Issuer (as defined below) or its agent for registration of transfer,exchange or payment, and any Covered Bond issued is registered in the name of Cede & Co. orsuch other name as is requested by an authorised representative of DTC (and any payment ismade to Cede & Co. or to such other entity as is requested by an authorised representative of
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DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OROTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered ownerhereof, Cede & Co. or other nominee has an interest herein.
Unless and until it is exchanged in whole for securities in definitive registered form, this notemay not be transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTCto DTC or another nominee of DTC or by DTC or any such nominee to a successor depository ora nominee of such successor depository.]23
National Bank of Canada(the “Issuer”)
(a Canadian chartered Bank)
RULE 144A GLOBAL COVERED BOND
and
unconditionally and irrevocably guaranteed as to payments of interest and principal by
NBC Covered Bond (Legislative) Guarantor Limited Partnership(established under the Limited Partnerships Act (Ontario))
(the “Guarantor”)
The Issuer hereby certifies that __________________ is, at the date hereof, entered in theRegister as the holder of the aggregate nominal amount of __________________ of a dulyauthorized issue of Covered Bonds of the Issuer (the “Covered Bonds”) of the aggregatenominal amount, Specified Currency(ies) and Specified Denomination(s) as are specified in theFinal Terms applicable to the Covered Bonds (the “Final Terms”), a copy of which is annexedhereto. References herein to the Conditions shall be to the Terms and Conditions of the CoveredBonds as set out in Schedule 1 to the Trust Deed (as defined below) as supplemented, replacedand modified by the Final Terms but, in the event of any conflict between the provisions of thesaid Conditions and the information in the Final Terms, the Final Terms will prevail.
Words and expressions defined in the Conditions shall bear the same meanings when used in thisGlobal Covered Bond.
This Global Covered Bond is issued subject to, and with the benefit of, the Conditions and aTrust Deed (such Trust Deed as modified and/or supplemented and/or restated from time to time,the “Trust Deed”) dated October 31, 2013 made between the Issuer, the Guarantor andComputershare Trust Company of Canada, as Bond Trustee, for, inter alios, the CoveredBondholders.
For value received, the Issuer, subject to and in accordance with the Conditions and the TrustDeed, promises to pay to such registered holder on each Instalment Date (if the Covered Bondsare repayable in instalments) and on the Final Maturity Date and/or on such earlier date(s) as all
23 Delete if not deposited with DTC.
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or any of the Covered Bonds represented by this Global Covered Bond may become due andrepayable in accordance with the Conditions and the Trust Deed, the amount payable under theConditions in respect of such Covered Bonds on each such date and to pay interest (if any) on thePrincipal Amount Outstanding of the Covered Bonds from time to time represented by thisGlobal Covered Bond calculated and payable as provided in the Conditions and the Trust Deedtogether with any other sums payable under the Conditions and the Trust Deed, uponpresentation and, at maturity, surrender of this Global Covered Bond at the office of theRegistrar specified in the Final Terms.
On any redemption or payment of an instalment or interest being made in respect of, or purchaseand cancellation of, any of the Covered Bonds represented by this Global Covered Bond detailsof such redemption, payment, purchase and cancellation (as the case may be) shall be entered byor on behalf of the Issuer in the Register. Upon any such redemption, payment of an instalment,purchase and cancellation the nominal amount of this Global Covered Bond and the CoveredBonds represented by this Global Covered Bond shall be reduced by the Principal AmountOutstanding of such Covered Bonds so redeemed or purchased and cancelled or the amount ofsuch instalment. The Principal Amount Outstanding from time to time of this Global CoveredBond and of the Covered Bonds represented by this Global Covered Bond following any suchredemption, payment of an instalment, purchase and cancellation as aforesaid or any exchange asreferred to below shall be the Principal Amount Outstanding most recently entered in theRegister.
This Global Covered Bond may be exchanged (free of charge) in whole, but not in part, forRegistered Definitive Covered Bonds without Receipts, Coupons and/or Talons attached (on thebasis that all the appropriate details have been included on the face of such Registered DefinitiveCovered Bonds and the relevant information supplementing, replacing or modifying theConditions appearing in the Final Terms has been endorsed on or attached to such RegisteredDefinitive Bearer Covered Bonds) either, as specified in the applicable Final Terms:
(i) upon not less than 60 days’ written notice being given to the Registrar by Euroclear BankS.A./N.Y. (“Euroclear”) and/or Clearstream Banking, Société anonyme (“Clearstream,Luxembourg”) acting on the instructions of any holder of an interest in this Global CoveredBond); or
(ii) upon the occurrence of an Exchange Event.
An “Exchange Event” means:
1. in the case of Covered Bonds registered in the name of a nominee for a commondepositary for Euroclear and Clearstream, Luxembourg, the Issuer has been notified that bothEuroclear and Clearstream, Luxembourg have been closed for business for a continuous periodof 14 days (other than by reason of holiday, statutory or otherwise) or have announced anintention permanently to cease business or have in fact done so and no successor clearing systemis available; or
2. in the case of Covered Bonds registered in the name of a nominee for DTC, either theDepository Trust Company (“DTC”) has notified the Issuer that it is unwilling or unable to
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continue to act as depositary for the Covered Bonds and no alternative clearing system isavailable or DTC has ceased to constitute a clearing agency registered under the Exchange Act;or
3. the Issuer has or will become subject to adverse tax consequences which would not besuffered were the Covered Bonds in definitive form and a certificate to such effect from twoAuthorized Signatories of the Issuer has been given to the Bond Trustee.
If this Global Covered Bond is exchangeable following the occurrence of an Exchange Event:
the Issuer will promptly give notice to Covered Bondholders in accordance with Condition 14(Notices) upon the occurrence of such Exchange Event; and
DTC, Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any holder of aninterest in this Global Covered Bond) may give notice to the Registrar requesting exchange and,in the event of the occurrence of an Exchange Event as described in (2) above, the Issuer mayalso give notice to the Registrar requesting exchange.
Any such exchange shall occur on a date specified in the notice not more than 10 days after thedate of receipt of the first relevant notice by the Registrar.
The first notice requesting exchange in accordance with the above provisions shall give rise tothe issue of Registered Definitive Covered Bonds for the Principal Amount Outstanding ofCovered Bonds represented by this Global Covered Bond.
Registered Definitive Covered Bonds will be issued in the minimum denominations specified inthe Final Terms.
Any such exchange as aforesaid will be made upon presentation of this Global Covered Bond bythe registered holder at the office of the Registrar on any Business Day in the place ofpresentation.
Covered Bonds represented by this Global Covered Bond are transferable only in accordancewith, and subject to, the provisions hereof and the Agency Agreement dated October 31, 2013(as amended and/or supplemented and/or restated from time to time) and the rules and operatingprocedures of Euroclear and Clearstream, Luxembourg and DTC.
On any exchange or transfer as aforesaid pursuant to which either (i) Covered Bonds representedby this Global Covered Bond are no longer so represented or (ii) if Covered Bonds not sorepresented are to be so represented details of such exchange or transfer shall be entered by or onbehalf of the Issuer in the Register, whereupon the nominal amount of this Global Covered Bondand the Covered Bonds held by the registered holder hereof shall be increased or reduced (as thecase may be) by the nominal amount so exchanged or transferred.
Until the exchange of the whole of this Global Covered Bond as aforesaid, the registered holderhereof shall (subject as provided in the next paragraph) in all respects be entitled to the same
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benefits as if he were the registered holder of Registered Definitive Covered Bonds in theform(s) set out in Part A or B (as applicable) of Part 3 of Schedule 3 to the Trust Deed.
In the case of Covered Bonds registered in the name of a nominee of a common depositary forEuroclear and Clearstream, Luxembourg, each person (other than Euroclear or Clearstream,Luxembourg) who is for the time being shown in the records of Euroclear or Clearstream,Luxembourg as the holder of a particular principal amount of the Covered Bonds represented bythis Global Covered Bond (in which regard any certificate or other document issued by Euroclearor Clearstream, Luxembourg as to the principal amount of such Covered Bonds standing to theaccount of any person shall be conclusive and binding for all purposes save in the case ofmanifest error) shall be treated by the Issuer, the Guarantor, the Bond Trustee, the Registrar andany other Transfer Agent as the holder of such principal amount of such Covered Bonds for allpurposes other than with respect to the payment of principal and interest on such principalamount of such Covered Bonds, the right to which shall be vested, as against the Issuer and theGuarantor, solely in the registered holder of this Global Covered Bond in accordance with andsubject to the terms of this Global Covered Bond and the Trust Deed.
Subject as provided in the Trust Deed, each person who is for the time being shown in therecords of DTC as entitled to a particular nominal amount of the Covered Bonds represented bythis Global Covered Bond (in which regard any certificate or other document issued by DTC asto the nominal amount of such Covered Bonds standing to the account of any person shall beconclusive and binding for all purposes save in the case of manifest error) shall be deemed to bethe holder of such nominal amount of such Covered Bonds for all purposes other than withrespect of payments on, and voting, giving consents and making requests in respect of, suchnominal amount of such Covered Bonds for which purpose the registered holder of this GlobalCovered Bond shall be deemed to be the holder of such nominal amount of the Covered Bonds inaccordance with and subject to the terms of this Global Covered Bond and the Trust Deed.
For the purposes of disclosure pursuant to the Interest Act (Canada) and not for any otherpurpose, where in any Covered Bond (i) a rate of interest is to be calculated on the basis of a yearof 360 days, the yearly rate of interest to which the 360 day rate is equivalent is such ratemultiplied by the number of days in the year of which such calculation is made and divided by360, or (ii) a rate of interest is to be calculated during a leap year, the yearly rate of interest towhich such rate is equivalent is such rate multiplied by 366 and divided by 365.
This Global Covered Bond is governed by, and shall be construed in accordance with, the lawsof the Province of Ontario and the federal laws of Canada applicable therein.
This Global Covered Bond shall not be valid unless authenticated by the Registrar specified inthe Final Terms.
IN WITNESS whereof the Issuer has caused this Global Covered Bond to be signed manually orin facsimile by persons duly authorized on its behalf.
Issued as of [ ].
National Bank of Canada
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By: By:Duly Authorized Duly Authorized
Authenticated by one of the following:
[The Bank of New York Mellon (Luxembourg) S.A./ The Bank of New York Mellon]
as Registrar without recourse, warranty or liability.
By:Authorized Officer
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PART 3FORM OF REGISTERED DEFINITIVE COVERED BOND
Part A
Issued in Reliance on Rule 144A
THIS SECURITY AND ANY GUARANTEE IN RESPECT THEREOF HAS NOT BEENAND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, ASAMENDED (THE “SECURITIES ACT”), OR ANY OTHER APPLICABLE U.S. STATESECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLDWITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITSACQUISITION HEREOF, THE HOLDER (A) REPRESENTS THAT IT IS A“QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THESECURITIES ACT) PURCHASING THE SECURITY FOR ITS OWN ACCOUNT ORFOR THE ACCOUNT OF ONE OR MORE QUALIFIED INSTITUTIONAL BUYERS;(B) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THESECURITY EXCEPT IN ACCORDANCE WITH THE AGENCY AGREEMENT INRESPECT OF THIS SECURITY (THE “AGENCY AGREEMENT”) AND, PRIOR TOTHE DATE WHICH IS ONE YEAR AFTER THE LATER OF THE LAST ISSUE DATEFOR THE SERIES AND THE LAST DATE ON WHICH THE ISSUER OR ANAFFILIATE OF THE ISSUER WAS THE OWNER OF SUCH SECURITY, OTHERTHAN (1) TO THE ISSUER OR ANY AFFILIATE THEREOF, (2) INSIDE THEUNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES ISA QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144AUNDER THE SECURITIES ACT PURCHASING THE SECURITY FOR ITS OWNACCOUNT OR FOR THE ACCOUNT OF ONE OR MORE QUALIFIEDINSTITUTIONAL BUYERS IN A TRANSACTION MEETING THE REQUIREMENTSOF RULE 144A, (3) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE903 OR RULE 904 UNDER THE SECURITIES ACT, (4) PURSUANT TO THEEXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THESECURITIES ACT (IF AVAILABLE) OR (5) PURSUANT TO AN EFFECTIVEREGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE INACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OFTHE UNITED STATES AND ANY OTHER JURISDICTION; AND (C) IT AGREESTHAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY ISTRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THIS SECURITY AND RELATED DOCUMENTATION (INCLUDING, WITHOUTLIMITATION, THE AGENCY AGREEMENT REFERRED TO HEREIN) MAY BEAMENDED OR SUPPLEMENTED FROM TIME TO TIME, WITHOUT THECONSENT OF, BUT UPON NOTICE TO, THE HOLDER OF SUCH SECURITY SENTTO ITS REGISTERED ADDRESS, TO MODIFY THE RESTRICTIONS ON ANDPROCEDURES FOR RESALES AND OTHER TRANSFERS OF THIS SECURITY TOREFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE
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INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO RESALES OROTHER TRANSFERS OF RESTRICTED SECURITIES GENERALLY. THE HOLDEROF THIS SECURITY SHALL BE DEEMED, BY ITS ACCEPTANCE OR PURCHASEHEREOF, TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT(EACH OF WHICH SHALL BE CONCLUSIVE AND BINDING ON THE HOLDERHEREOF AND ALL FUTURE HOLDERS OF THIS SECURITY AND ANYSECURITIES ISSUED IN EXCHANGE OR SUBSTITUTION THEREFOR, WHETHEROR NOT ANY NOTATION THEREOF IS MADE HEREON).
BY ITS PURCHASE AND HOLDING OF THIS SECURITY (OR ANY INTERESTHEREIN), THE PURCHASER OR HOLDER WILL BE DEEMED TO HAVEREPRESENTED AND AGREED THAT EITHER (A) IT IS NOT AND FOR SO LONGAS IT HOLDS THIS SECURITY (OR ANY INTEREST HEREIN) WILL NOT BE (I) AN“EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE U.S.EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED(“ERISA”) THAT IS SUBJECT TO TITLE I OF ERISA, (II) A “PLAN” AS DEFINED INAND SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF1986, AS AMENDED (THE “CODE”), (III) AN ENTITY WHOSE UNDERLYINGASSETS INCLUDE THE ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLANSUBJECT TO ERISA OR OTHER PLAN SUBJECT TO SECTION 4975 OF THE CODE,OR (IV) A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER EMPLOYEEBENEFIT PLAN WHICH IS SUBJECT TO ANY U.S. FEDERAL, STATE, LOCAL ORNON-U.S. LAW, THAT IS SUBSTANTIALLY SIMILAR TO THE PROVISIONS OFSECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, OR (B) ITSACQUISITION AND HOLDING OF THIS SECURITY WILL NOT RESULT IN APROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975OF THE CODE OR, IN THE CASE OF SUCH A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER EMPLOYEE BENEFIT PLAN, ANY SUCH SUBSTANTIALLYSIMILAR U.S. FEDERAL, STATE, LOCAL OR NON-U.S. LAW FOR WHICH ANEXEMPTION IS NOT AVAILABLE.
PROSPECTIVE PURCHASERS ARE HEREBY NOTIFIED THAT THE SELLER OFTHIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THEPROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE144A.
National Bank of Canada(the “Issuer”)
(a Canadian chartered Bank)
[Specified Currency and aggregate nominal amount of Tranche]COVERED BONDS DUE
[Year of Maturity]
unconditionally and irrevocably guaranteed as to payments of interest and principal by
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NBC Covered Bond (Legislative) Guarantor Limited Partnership(established under the Limited Partnerships Act (Ontario))
(the “Guarantor”)
This Covered Bond is one of a Series of Covered Bonds of [Specified Currency(ies) andSpecified Denomination(s)] each of the Issuer (“Covered Bonds”). References herein to theConditions shall be to the Terms and Conditions [endorsed hereon/set out in Schedule 1 to theTrust Deed (as defined below) which shall be incorporated by reference herein and have effect asif set out herein] as supplemented, replaced and modified by the relevant information appearingin the Final Terms (the “Final Terms”) endorsed hereon but, in the event of any conflictbetween the provisions of the said Conditions and such information in the Final Terms, suchinformation will prevail.
Words and expressions defined in the Conditions shall bear the same meanings when used in thisCovered Bond.
This Covered Bond is issued subject to, and with the benefit of, the Conditions and a Trust Deed(such Trust Deed as modified and/or supplemented and/or restated from time to time, the “TrustDeed”) dated October 31, 2013 made between the Issuer, the Guarantor and ComputershareTrust Company of Canada, as Bond Trustee, for, inter alios, the Covered Bondholders.
For value received, the Issuer, subject to and in accordance with the Conditions and the TrustDeed, promises to pay to _____________________ (being the person registered in the Registeror, if more than one person is so registered, the first of such named persons) on [each InstalmentDate and] the Final Maturity Date or on such earlier date as this Covered Bond may become dueand repayable in accordance with the Conditions and the Trust Deed, the amount payable onredemption of this Covered Bond and to pay interest (if any) on the Principal AmountOutstanding of this Covered Bond calculated and payable as provided in the Conditions and theTrust Deed together with any other sums payable under the Conditions and the Trust Deed.
For the purposes of disclosure pursuant to the Interest Act (Canada) and not for any otherpurpose, where in any Covered Bond (i) a rate of interest is to be calculated on the basis of a yearof 360 days, the yearly rate of interest to which the 360 day rate is equivalent is such ratemultiplied by the number of days in the year for which such calculation is made and divided by360, or (ii) a rate of interest is to be calculated during a leap year, the yearly rate of interest towhich such rate is equivalent is such rate multiplied by 366 and divided by 365.
This Covered Bond shall not be valid unless authenticated by [The Bank of New York Mellon(Luxembourg) S.A./ The Bank of New York Mellon] / other], as Registrar.
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IN WITNESS whereof this Covered Bond has been executed on behalf of the Issuer.
Issued as of [ ].
National Bank of Canada
By: By:Duly Authorized Duly Authorized
Authenticated by one of the following:
[The Bank of New York Mellon (Luxembourg) S.A./ The Bank of New York Mellon]
as Registrar.
By:Authorized Officer
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FORM OF TRANSFER OF REGISTERED COVERED BOND
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s) to
............................................................................................................................................................
............................................................................................................................................................
............................................................................................................................................................
(Please print or type name and address (including postal code) of transferee)
[Specified Currency] [ ] nominal amount of this Covered Bond and all rights hereunder,hereby irrevocably constituting and appointing ............................................ as attorney to transfersuch nominal amount of this Covered Bond in the register maintained by [The Bank of NewYork Mellon (Luxembourg) S.A./ The Bank of New York Mellon] / other] with full powerof substitution.
Signature(s) .......................................
.......................................
Date: .......................................
N.B. This form of transfer must be accompanied by such documents, evidence and informationas may be required pursuant to the Conditions and must be executed under the hand ofthe transferor or, if the transferor is a corporation, either under its common seal or underthe hand of two of its officers duly authorized in writing and, in such latter case, thedocument so authorizing such offices must be delivered with this form of transfer.
Delete as applicable.
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[CONDITIONS]
[Conditions to be as set out in Schedule 1 to this Trust Deed or such other form as may be agreedbetween the Issuer, the Issuing and Paying Agent, the Bond Trustee and the relevant Dealer(s),but shall not be endorsed if not required by the relevant Stock Exchange]
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FINAL TERMS
[Here to be set out the text of the relevant information supplementing, replacing or modifying theConditions which appears in the Final Terms relating to the Covered Bonds]
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Part B
Issued in Reliance on Regulation S
THIS SECURITY AND ANY GUARANTEE IN RESPECT THEREOF HAS NOT BEENAND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, ASAMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE U.S. STATESECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLDWITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE AGENCY AGREEMENT INRESPECT OF THIS SECURITY (THE “AGENCY AGREEMENT”) AND PURSUANTTO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT ORPURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THESECURITIES ACT. UNTIL THE EXPIRY OF THE PERIOD OF 40 DAYS AFTER THECOMPLETION OF THE DISTRIBUTION OF ALL THE SECURITIES OF THETRANCHE OF WHICH THIS SECURITY FORMS PART, SALES MAY NOT BEMADE IN THE UNITED STATES OR TO U.S. PERSONS UNLESS MADE (I)PURSUANT TO RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIESACT OR (II) TO QUALIFIED INSTITUTIONAL BUYERS AS DEFINED IN, AND INTRANSACTIONS PURSUANT TO, RULE 144A UNDER THE SECURITIES ACT.
BY ITS PURCHASE AND HOLDING OF THIS SECURITY (OR ANY INTERESTHEREIN), THE PURCHASER OR HOLDER WILL BE DEEMED TO HAVEREPRESENTED AND AGREED THAT EITHER (A) IT IS NOT AND FOR SO LONGAS IT HOLDS THIS SECURITY (OR ANY INTEREST HEREIN) WILL NOT BE (I) AN“EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE U.S.EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED(“ERISA”) THAT IS SUBJECT TO TITLE I OF ERISA, (II) A “PLAN” AS DEFINED INAND SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF1986, AS AMENDED (THE “CODE”), (III) AN ENTITY WHOSE UNDERLYINGASSETS INCLUDE THE ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLANSUBJECT TO ERISA OR OTHER PLAN SUBJECT TO SECTION 4975 OF THE CODE,OR (IV) A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER EMPLOYEEBENEFIT PLAN WHICH IS SUBJECT TO ANY U.S. FEDERAL, STATE, LOCAL ORNON-U.S. LAW, THAT IS SUBSTANTIALLY SIMILAR TO THE PROVISIONS OFSECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR (B) ITSACQUISITION AND HOLDING OF THIS SECURITY WILL NOT RESULT IN APROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975OF THE CODE OR, IN THE CASE OF SUCH A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER EMPLOYEE BENEFIT PLAN, ANY SUCH SUBSTANTIALLYSIMILAR U.S. FEDERAL, STATE, LOCAL OR NON-U.S. LAW FOR WHICH ANEXEMPTION IS NOT AVAILABLE.
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National Bank of Canada(the “Issuer”)
(a Canadian chartered Bank)
[Specified Currency and aggregate nominal amount of Tranche]COVERED BONDS DUE
[Year of Maturity]
unconditionally and irrevocably guaranteed as to payments of interest and principal by
NBC Covered Bond (Legislative) Guarantor Limited Partnership(established under the Limited Partnerships Act (Ontario))
(the “Guarantor”)
This Covered Bond is one of a Series of Covered Bonds of [Specified Currency(ies) andSpecified Denomination(s)] each of the Issuer (“Covered Bonds”). References herein to theConditions shall be to the Terms and Conditions [endorsed hereon/set out in Schedule 1 to theTrust Deed (as defined below) which shall be incorporated by reference herein and have effect asif set out herein] as supplemented, replaced and modified by the relevant information appearingin the Final Terms (the “Final Terms”) endorsed hereon but, in the event of any conflictbetween the provisions of the said Conditions and such information in the Final Terms, suchinformation will prevail.
Words and expressions defined in the Conditions shall bear the same meanings when used in thisCovered Bond.
This Covered Bond is issued subject to, and with the benefit of, the Conditions and a Trust Deed(such Trust Deed as modified and/or supplemented and/or restated from time to time, the “TrustDeed”) dated October 31, 2013 made between the Issuer, the Guarantor and ComputershareTrust Company of Canada, as Bond Trustee, for, inter alios, the Covered Bondholders.
For value received, the Issuer, subject to and in accordance with the Conditions and the TrustDeed, promises to pay to ________________ (being the person registered in the Register or, ifmore than one person is so registered, the first of such named persons) on [each Instalment Dateand] the Final Maturity Date or on such earlier date as this Covered Bond may become due andrepayable in accordance with the Conditions and the Trust Deed, the amount payable onredemption of this Covered Bond and to pay interest (if any) on the Principal AmountOutstanding of this Covered Bond calculated and payable as provided in the Conditions and theTrust Deed together with any other sums payable under the Conditions and the Trust Deed.
For the purposes of disclosure pursuant to the Interest Act (Canada) and not for any otherpurpose, where in any Covered Bond (i) a rate of interest is to be calculated on the basis of a yearof 360 days, the yearly rate of interest to which the 360 day rate is equivalent is such ratemultiplied by the number of days in the year for which such calculation is made and divided by360, or (ii) a rate of interest is to be calculated during a leap year, the yearly rate of interest towhich such rate is equivalent is such rate multiplied by 366 and divided by 365.
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This Covered Bond shall not be valid unless authenticated by [[The Bank of New York Mellon(Luxembourg) S.A./ The Bank of New York Mellon]/ other], as Registrar.
IN WITNESS whereof this Covered Bond has been executed on behalf of the Issuer.
Issued as of [ ].
National Bank of Canada
By: By:Duly Authorized Duly Authorized
Authenticated by one of the following:
[The Bank of New York Mellon (Luxembourg) S.A./ The Bank of New York Mellon]
as Registrar.
By:Authorized Officer
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FORM OF TRANSFER OF REGISTERED COVERED BOND
............................................................................................................................................................
............................................................................................................................................................
............................................................................................................................................................
(Please print or type name and address (including postal code) of transferee)
[Specified Currency] [ ] nominal amount of this Covered Bond and all rights hereunder,hereby irrevocably constituting and appointing ............................................ as attorney to transfersuch nominal amount of this Covered Bond in the register maintained by [The Bank of NewYork Mellon (Luxembourg) S.A./ The Bank of New York Mellon] /other with full power ofsubstitution.
Signature(s) .......................................
.......................................
Date: .......................................
N.B. This form of transfer must be accompanied by such documents, evidence and informationas may be required pursuant to the Conditions and must be executed under the hand ofthe transferor or, if the transferor is a corporation, either under its common seal or underthe hand of two of its officers duly authorized in writing and, in such latter case, thedocument so authorizing such offices must be delivered with this form of transfer.
Delete as applicable.
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[CONDITIONS]
[Conditions to be as set out in Schedule 1 to this Trust Deed or such other form as may be agreedbetween the Issuer, the Issuing and Paying Agent, the Bond Trustee and the relevant Dealer(s),but shall not be endorsed if not required by the relevant Stock Exchange]
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FINAL TERMS
[Here to be set out the text of the relevant information supplementing, replacing or modifying theConditions which appears in the Final Terms relating to the Covered Bonds]
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SCHEDULE 4FORM OF NOTICE TO PAY
[On the letterhead of the Bond Trustee]
To: National Bank of Canada (the “Issuer”)
and
NBC Covered Bond (Legislative) Guarantor Limited Partnership (the “Guarantor”)
[insert date]
Dear Sirs,
Notice to Pay under Covered Bond Guarantee
We refer to the U.S.$7 billion Global Covered Bond Programme of the Issuer and the trust deeddated October 31, 2013 made between the Issuer, Computershare Trust Company of Canada, asBond Trustee, and the Guarantor (the “Trust Deed”) as the same may be amended, restated,supplemented or replaced.
We hereby confirm that an [ ] Event of Default has occurred and that we have served an [ ]Acceleration Notice on the Issuer. Accordingly, this notice shall constitute a Notice to Pay whichis served upon the Issuer and the Guarantor pursuant to Clause 7 of the Trust Deed.
Unless the context otherwise requires, capitalised terms used in this Notice to Pay and notdefined herein shall have the meanings provided in the Master Definition and ConstructionAgreement.
Yours faithfully,
[ ]
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SCHEDULE 5PROVISIONS FOR MEETINGS OF COVERED BONDHOLDERS
1. (A) As used in this Schedule the following expressions shall have the followingmeanings unless the context otherwise requires:
(i) “voting certificate” shall mean an English language certificate issued by aPaying Agent and dated in which it is stated:
(a) that on the date thereof Bearer Covered Bonds (whether indefinitive form or represented by a Global Covered Bond and notbeing Covered Bonds in respect of which a block votinginstruction has been issued and is outstanding in respect of themeeting specified in such voting certificate or any adjourned suchmeeting) were deposited with such Paying Agent or (to thesatisfaction of such Paying Agent) were held to its order or underits control or blocked in an account with a clearing system and thatno such Bearer Covered Bonds will cease to be so deposited orheld or blocked until the first to occur of:
(1) the conclusion of the meeting specified in such certificateor, if later, of any adjourned such meeting; and
(2) the surrender of the certificate to the Paying Agent whoissued the same; and
(b) that the bearer thereof is entitled to attend and vote at such meetingand any adjourned such meeting in respect of the Covered Bondsrepresented by such certificate;
(ii) “block voting instruction” shall mean an English language documentissued by a Paying Agent and dated in which:
(a) it is certified that Bearer Covered Bonds (whether in definitiveform or represented by a Global Covered Bond and not beingCovered Bonds in respect of which a voting certificate has beenissued and is outstanding in respect of the meeting specified insuch block voting instruction and any adjourned such meeting)have been deposited with such Paying Agent or (to the satisfactionof such Paying Agent) were held to its order or under its control orblocked in an account with a clearing system and that no suchBearer Covered Bonds will cease to be so deposited or held orblocked until the first to occur of:
(1) the conclusion of the meeting specified in such documentor, if later, of any adjourned such meeting; and
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(2) the surrender to the Paying Agent not less than 48 hoursbefore the time for which such meeting or any adjournedsuch meeting is convened of the receipt issued by suchPaying Agent in respect of each such deposited BearerCovered Bond which is to be released or (as the case mayrequire) the Bearer Covered Bond or Bearer CoveredBonds ceasing with the agreement of the Paying Agent tobe held to its order or under its control or so blocked andthe giving of notice by the Paying Agent to the Issuer inaccordance with paragraph 17 hereof of the necessaryamendment to the block voting instruction;
(b) it is certified that each holder of such Bearer Covered Bonds hasinstructed such Paying Agent that the vote(s) attributable to theBearer Covered Bond or Bearer Covered Bonds so deposited orheld or blocked should be cast in a particular way in relation to theresolution or resolutions to be put to such meeting or anyadjourned such meeting and that all such instructions are duringthe period commencing 48 hours prior to the time for which suchmeeting or any adjourned such meeting is convened and ending atthe conclusion or adjournment thereof neither revocable norcapable of amendment;
(c) the aggregate principal amount of the Bearer Covered Bonds sodeposited or held or blocked are listed distinguishing with regardto each such resolution between those in respect of whichinstructions have been given as aforesaid that the votes attributablethereto should be cast in favour of the resolution and those inrespect of which instructions have been so given that the votesattributable thereto should be cast against the resolution; and
(d) one or more persons named in such document (each hereinaftercalled a “proxy”) is or are authorized and instructed by suchPaying Agent to cast the votes attributable to the Bearer CoveredBonds so listed in accordance with the instructions referred to in(c) above as set out in such document;
(iii) “24 hours” shall mean a period of 24 hours including all or part of a dayupon which banks are open for business in both the place where therelevant meeting is to be held and in each of the places where the PayingAgents have their specified offices (disregarding for this purpose the dayupon which such meeting is to be held) and such period shall be extendedby one period or, to the extent necessary, more periods of 24 hours untilthere is included as aforesaid all or part of a day upon which banks areopen for business in all of the places as aforesaid; and
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(iv) “48 hours” shall mean a period of 48 hours including all or part of twodays upon which banks are open for business both in the place where therelevant meeting is to be held and in each of the places where the PayingAgents have their specified offices (disregarding for this purpose the dayupon which such meeting is to be held) and such period shall be extendedby one period or, to the extent necessary, more periods of 24 hours untilthere is included as aforesaid all or part of two days upon which banks areopen for business in all of the places as aforesaid.
(B) A holder of a Bearer Covered Bond (whether in definitive form or represented bya Global Covered Bond) may obtain a voting certificate in respect of such BearerCovered Bond from a Paying Agent or require a Paying Agent to issue a blockvoting instruction in respect of such Bearer Covered Bond by depositing suchBearer Covered Bond with such Paying Agent or (to the satisfaction of suchPaying Agent) by such Bearer Covered Bond being held to its order or under itscontrol or being blocked in an account with a clearing system, in each case notless than 48 hours before the time fixed for the relevant meeting and on the termsset out in sub paragraph (A)(i)(a) or (A)(ii)(a) above (as the case may be), and (inthe case of a block voting instruction) instructing such Paying Agent to the effectset out in sub paragraph (A)(ii)(b) above. The holder of any voting certificate orthe proxies named in any block voting instruction shall for all purposes inconnection with the relevant meeting or adjourned meeting of CoveredBondholders be deemed to be the holder of the Bearer Covered Bonds to whichsuch voting certificate or block voting instruction relates and the Paying Agentwith which such Bearer Covered Bonds have been deposited or the personholding the same to the order or under the control of such Paying Agent or theclearing system in which such Bearer Covered Bonds have been blocked shall bedeemed for such purposes not to be the holder of those Bearer Covered Bonds.
(C) (i) A holder of Registered Covered Bonds (whether in definitive form orrepresented by a Registered Global Covered Bond) may, by an instrumentin writing in the English language (a “form of proxy”) signed by theholder or, in the case of a corporation, executed under its common seal orsigned on its behalf by an attorney or a duly authorized officer of thecorporation and delivered to the specified office of the Registrar not lessthan 48 hours before the time fixed for the relevant meeting, appoint anyperson (a proxy) to act on his or its behalf in connection with any meetingof the Bondholders and any adjourned such meeting.
(ii) Any holder of Registered Covered Bonds (whether in definitive form orrepresented by a Registered Global Covered Bond) which is a corporationmay by resolution of its directors or other governing body authorize anyperson to act as its representative (a “representative”) in connection withany meeting of the Bondholders and any adjourned such meeting.
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(iii) Any proxy appointed pursuant to subparagraph (i) above or representativeappointed pursuant to subparagraph (ii) above shall so long as suchappointment remains in force be deemed, for all purposes in connectionwith the relevant meeting or adjourned meeting of the Bondholders, to bethe holder of the Registered Covered Bonds to which such appointmentrelates and the holder of the Registered Covered Bonds shall be deemedfor such purposes not to be the holder.
(iv) For so long as any of the Registered Covered Bonds is represented by aGlobal Covered Bond registered in the name of DTC or its nominee, DTCmay mail an Omnibus Proxy to the Relevant Issuer in accordance with andin the form used by DTC as part of its usual procedures from time to timein relation to meetings of Bondholders. Such Omnibus Proxy shall assignthe voting rights in respect of the relevant meeting to DTC’ s directparticipants as of the record date specified therein. Any such assigneeparticipant may, by an instrument in writing in the English languagesigned by such assignee participant, or, in the case of a corporation,executed under its common seal or signed on its behalf by an attorney or aduly authorized officer of the corporation and delivered to the specifiedoffice of the Registrar or any Transfer Agent before the time fixed for therelevant meeting, appoint any person (a sub-proxy) to act on his or itsbehalf in connection with any meeting of Bondholders and any adjournedsuch meeting. All references to proxy or proxies in this Schedule otherthan in this paragraph shall be read so as to include references to sub-proxy or sub-proxies.
2. The Issuer, the Guarantor or the Bond Trustee or (in relation to a meeting for the passingof a Programme Resolution) the Covered Bondholders of any Series may at any time and theIssuer shall upon a requisition in writing in the English language signed by the holders of not lessthan five per cent. of the Principal Amount Outstanding of the Covered Bonds for the time beingoutstanding convene a meeting of the Covered Bondholders and if the Issuer makes default for aperiod of seven days in convening such a meeting the same may be convened by the BondTrustee or the requisitionists. Every such meeting shall be held at such time and place as theBond Trustee may appoint or approve.
3. At least 21 days’ notice (exclusive of the day on which the notice is given and the day onwhich the meeting is to be held) specifying the place, day and hour of meeting shall be given tothe holders of the relevant Covered Bonds prior to any meeting of such holders in the mannerprovided by Condition 14 (Notices). Such notice, which shall be in the English language, shallstate generally the nature of the business to be transacted at the meeting thereby convened but[(except for an Extraordinary Resolution)] it shall not be necessary to specify in such notice theterms of any resolution to be proposed. Such notice shall include statements, if applicable, to theeffect that (i) Bearer Covered Bonds may, not less than 48 hours before the time fixed for themeeting, be deposited with Paying Agents or (to their satisfaction) held to their order or undertheir control or blocked in an account with a clearing system for the purpose of obtaining votingcertificates or appointing proxies, or (ii) the holder of Registered Covered Bonds may appoint
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proxies by executing and delivering a form of proxy in the English language to the specifiedoffice of the Registrar not less than 48 hours before the time fixed for the meeting or, in the caseof corporations, may appoint representatives by resolution of the directors or other governingbody. A copy of the notice shall be sent by post to the Bond Trustee (unless the meeting isconvened by the Bond Trustee), and to the Issuer (unless the meeting is convened by the Issuer)and to the Guarantor (unless the meeting is convened by the Guarantor).
4. A person (who may but need not be a Covered Bondholder) nominated in writing by theBond Trustee shall be entitled to take the chair at the relevant meeting or adjourned meeting butif no such nomination is made or if at any meeting or adjourned meeting the person nominatedshall not be present within 15 minutes after the time appointed for holding the meeting oradjourned meeting the Covered Bondholders present shall choose one of their number to beChairman, failing which the Issuer may appoint a Chairman. The Chairman of an adjournedmeeting need not be the same person as was Chairman of the meeting from which theadjournment took place.
5. At any such meeting one or more persons present holding Definitive Covered Bonds orvoting certificates or being proxies or representatives and holding or representing in theaggregate not less than one twentieth of the Principal Amount Outstanding of the Covered Bondsof the relevant Series for the time being outstanding shall (except for the purpose of passing anExtraordinary Resolution or a Programme Resolution) form a quorum for the transaction ofbusiness and no business (other than the choosing of a Chairman) shall be transacted at anymeeting unless the requisite quorum be present at the commencement of the relevant business.The quorum at any such meeting for passing an Extraordinary Resolution (subject as providedbelow) or a Programme Resolution shall be one or more persons present holding DefinitiveCovered Bonds or voting certificates or being proxies or representatives and holding orrepresenting not less than a clear majority of the aggregate Principal Amount Outstanding of theCovered Bonds of the relevant Series for the time being outstanding PROVIDED THAT at anymeeting the business of which includes any of the following matters (other than in relation to aProgramme Resolution) (each of which shall, subject only to Clause 20.2, only be capable ofbeing effected after having been approved by Extraordinary Resolution) namely:
(A) reduction or cancellation of the amount payable or, where applicable,modification of the method of calculating the amount payable or modification ofthe date of payment or, where applicable, modification of the method ofcalculating the date of payment in respect of any principal or interest in respect ofthe Covered Bonds;
(B) subject to any applicable redenomination provisions specified in the applicableFinal Terms, alteration of the currency in which payments under the CoveredBonds, Receipts and Coupons are to be made;
(C) alteration of the majority required to pass an Extraordinary Resolution;
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(D) any amendment to the Covered Bond Guarantee or the Security Agreement(except in a manner determined by the Bond Trustee not to be materiallyprejudicial to the interests of the Covered Bondholders of any Series);
(E) except in accordance with Condition 12, the sanctioning of any such scheme orproposal as is described in paragraph 18(I) below; and
(F) alteration of this proviso or the proviso to paragraph 6 below;
(each a “Series Reserved Matter”), the quorum shall be one or more persons presentholding Definitive Covered Bonds or voting certificates or being proxies orrepresentatives and holding or representing in the aggregate not less than two-thirds ofthe aggregate Principal Amount Outstanding of the Covered Bonds of the relevant Seriesfor the time being outstanding.
6. If within 15 minutes (or such longer period not exceeding 30 minutes as the Chairmanmay decide) after the time appointed for any such meeting a quorum is not present for thetransaction of any particular business, then, subject and without prejudice to the transaction ofthe business (if any) for which a quorum is present, the meeting shall if convened upon therequisition of Covered Bondholders be dissolved. In any other case it shall stand adjourned to thesame day in the next week (or if such day is a public holiday the next succeeding Business Day)at the same time and place (except in the case of a meeting at which an Extraordinary Resolutionis to be proposed in which case it shall stand adjourned for such period, being not less than 13clear days nor more than 42 clear days, and to such place as may be appointed by the Chairmaneither at or subsequent to such meeting and approved by the Bond Trustee). If within 15 minutes(or such longer period not exceeding 30 minutes as the Chairman may decide) after the timeappointed for any adjourned meeting a quorum is not present for the transaction of any particularbusiness, then, subject and without prejudice to the transaction of the business (if any) for whicha quorum is present, the Chairman may either (with the approval of the Bond Trustee) dissolvesuch meeting or adjourn the same for such period, being not less than 13 clear days (but withoutany maximum number of clear days), and to such place as may be appointed by the Chairmaneither at or subsequent to such adjourned meeting and approved by the Bond Trustee, and theprovisions of this sentence shall apply to all further adjourned such meetings. At any adjournedmeeting one or more persons present holding Definitive Covered Bonds or voting certificates orbeing proxies (whatever the nominal amount of the Covered Bonds of the relevant Series so heldor represented by them) shall (subject as provided below) form a quorum and shall have power topass any Extraordinary Resolution, Programme Resolution or other resolution and to decideupon all matters which could properly have been dealt with at the meeting from which theadjournment took place had the requisite quorum been present PROVIDED THAT at anyadjourned meeting the quorum for the transaction of business comprising any Series ReservedMatter shall be one or more persons present holding Definitive Covered Bonds or votingcertificates or being proxies and holding or representing in the aggregate not less than one-thirdof the aggregate Principal Amount Outstanding of the Covered Bonds of the relevant Series forthe time being outstanding.
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7. Notice of any adjourned meeting at which an Extraordinary Resolution is to be submittedshall be given in the same manner as notice of an original meeting but as if 10 were substitutedfor 21 in paragraph 3 above and such notice shall state the relevant quorum. Subject as aforesaidit shall not be necessary to give any notice of an adjourned meeting.
8. Every question submitted to a meeting shall be decided in the first instance by a show ofhands and in case of equality of votes the Chairman shall both on a show of hands and on a pollhave a casting vote in addition to the vote or votes (if any) to which he may be entitled as aCovered Bondholder or as a holder of a voting certificate or as a proxy or as a representative.
9. At any meeting unless a poll is (before or on the declaration of the result of the show ofhands) demanded by the Chairman, the Issuer, the Guarantor, the Bond Trustee or any personpresent holding a Definitive Covered Bond or a voting certificate or being a proxy orrepresentative (whatever the Principal Amount Outstanding of the Covered Bonds so held orrepresented by him) a declaration by the Chairman that a resolution has been carried or carriedby a particular majority or lost or not carried by a particular majority shall be conclusiveevidence of the fact without proof of the number or proportion of the votes recorded in favour ofor against such resolution.
10. Subject to paragraph 12 below, if at any such meeting a poll is so demanded it shall betaken in such manner and subject as hereinafter provided either at once or after an adjournmentas the Chairman directs and the result of such poll shall be deemed to be the resolution of themeeting at which the poll was demanded as at the date of the taking of the poll. The demand fora poll shall not prevent the continuance of the meeting for the transaction of any business otherthan the motion on which the poll has been demanded.
11. The Chairman may with the consent of (and shall if directed by) any such meetingadjourn the same from time to time and from place to place but no business shall be transacted atany adjourned meeting except business which might lawfully (but for lack of required quorum)have been transacted at the meeting from which the adjournment took place.
12. Any poll demanded at any such meeting on the election of a Chairman or on any questionof adjournment shall be taken at the meeting without adjournment.
13. The Bond Trustee and its lawyers and any director, officer or employee of a corporationbeing a bond trustee under the Trust Deed and any director or officer of the Issuer or, as the casemay be, the Guarantor and its or their lawyers and any other person authorized so to do by theBond Trustee may attend and speak at any meeting. Save as aforesaid, but without prejudice tothe proviso to the definition of “outstanding” as set out in the Master Definitions andConstruction Agreement, no person shall be entitled to attend and speak nor shall any person beentitled to vote at any meeting of Covered Bondholders or join with others in requesting theconvening of such a meeting or to exercise the rights conferred on Covered Bondholders byCondition 7 (Events of Default) unless he either produces the Definitive Covered Bond orDefinitive Covered Bonds of which he is the holder or a voting certificate or is a proxy. Noperson shall be entitled to vote at any meeting in respect of Covered Bonds held by, for thebenefit of, or on behalf of, the Issuer or the Guarantor. Nothing herein shall prevent any of the
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proxies named in any block voting instruction from being a director, officer or representative ofor otherwise connected with the Issuer or the Guarantor.
14. Subject as provided in paragraph 13 hereof at any meeting:
(A) on a show of hands every person who is present in person and produces a BearerDefinitive Covered Bond or voting certificate or is the holder of a RegisteredDefinitive Covered Bond is a proxy or representative shall have one vote; and
(B) on a poll every person who is so present shall have one vote in respect of eachU.S.$ 1,000 or such other amount as the Bond Trustee may in its absolutediscretion stipulate (or, in the case of meetings of holders of Covered Bondsdenominated in another currency, such amount in such other currency as the BondTrustee in its absolute discretion may stipulate) in the Principal AmountOutstanding of the Bearer Definitive Covered Bonds so produced or representedby the voting certificate so produced or in respect of which he is a proxy orrepresentative or in respect of which (being a Registered Definitive CoveredBond) he is the registered holder.
Without prejudice to the obligations of the proxies named in any block voting instructionor form of proxy any person entitled to more than one vote need not use all his votes orcast all the votes to which he is entitled in the same way.
15. The proxies named in any block voting instruction or form of proxy and representativesneed not be Covered Bondholders.
16. Each block voting instruction together (if so requested by the Bond Trustee) with proofsatisfactory to the Bond Trustee of its due execution or form of proxy on behalf of the relevantPaying Agent and each form of proxy should be deposited by one relevant Paying Agent or (asthe case may be) by the Registrar or the relevant Transfer Agent at such place as the BondTrustee shall approve not less than 24 hours before the time appointed for holding the meeting oradjourned meeting at which the proxies named in the block voting instruction propose to voteand in default the block voting instruction or form of proxy shall not be treated as valid unlessthe Chairman of the meeting decides otherwise before such meeting or adjourned meetingproceeds to business. A copy of each block voting instruction and form of proxy shall (if theBond Trustee so requires) be deposited with the Bond Trustee before the commencement of themeeting or adjourned meeting but the Bond Trustee shall not thereby be obliged to investigate orbe concerned with the validity of or the authority of the proxies named in any such block votinginstruction or form of proxy.
17. Any vote given in accordance with the terms of a block voting instruction or form ofproxy shall be valid notwithstanding the previous revocation or amendment of the block votinginstruction or form of proxy or of any of the relevant Covered Bondholders’ instructionspursuant to which it was executed PROVIDED THAT no intimation in writing of suchrevocation or amendment shall have been received from the relevant Paying Agent or in the caseof a Registered Covered Bond from the holder thereof by the Issuer at its registered office (orsuch other place as may have been required or approved by the Bond Trustee for the purpose) by
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the time being 24 hours respectively before the time appointed for holding the meeting oradjourned meeting at which the block voting instruction or form of proxy is to be used.
18. A meeting of the Covered Bondholders shall in addition to the powers hereinbefore givenhave the following powers exercisable only by Extraordinary Resolution (subject to theprovisions relating to quorum contained in paragraphs 5 and 6 above) namely:
(A) Power to sanction any compromise or arrangement proposed to be made betweenthe Issuer, the Guarantor, the Bond Trustee, any Appointee and the CoveredBondholders, Receiptholders and Couponholders or any of them.
(B) Power to sanction any abrogation, modification, compromise or arrangement inrespect of the rights of the Bond Trustee, any Appointee, the CoveredBondholders, the Receiptholders, Couponholders, or the Issuer or the Guarantoror against any other or others of them or against any of their property whethersuch rights shall arise under the Trust Deed or the other Transaction Documentsor otherwise.
(C) Power to assent to any modification of the provisions of the Trust Deed or theother Transaction Documents which shall be proposed by the Issuer, theGuarantor, the Bond Trustee or any Covered Bondholder.
(D) Power to give any authority or sanction which under the provisions of the TrustDeeds is required to be given by Extraordinary Resolution.
(E) Power to appoint any persons (whether Covered Bondholders or not) as acommittee or committees to represent the interests of the Covered Bondholdersand to confer upon such committee or committees any powers or discretion whichthe Covered Bondholders could themselves exercise by Extraordinary Resolution.
(F) Power to approve of a person to be appointed a trustee and power to remove anytrustee or trustees for the time being of the Trust Deed and/or the SecurityAgreement.
(G) Power to discharge or exonerate the Bond Trustee and/or any Appointee from allliability in respect of any act or omission for which the Bond Trustee and/or suchAppointee may have become responsible under the Trust Deed and/or theSecurity Agreement.
(H) Power to authorise the Bond Trustee and/or any Appointee to concur in andexecute and do all such deeds, instruments, acts and things as may be necessary tocarry out and give effect to any Extraordinary Resolution.
(I) Power to sanction any scheme or proposal for the exchange or sale of the CoveredBonds for or the conversion of the Covered Bonds into, or the cancellation of theCovered Bonds in consideration of, shares, stock, covered bonds, bonds,debentures, debenture stock and/or other obligations and/or securities of the Issuer
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or any other company formed or to be formed, or for or into or in consideration ofcash, or partly for or into or in consideration of such shares, stock, bonds, coveredbonds, debentures, debenture stock and/or other obligations and/or securities asdescribed above and partly for or into or in consideration of cash and for theappointment of some person with power on behalf of the holders of the CoveredBonds to execute an instrument of transfer of the Registered Covered Bonds heldby them in favour of the persons with or to whom the Covered Bonds are to beexchanged or sold respectively.
19. Any resolution passed at a meeting of the Covered Bondholders duly convened and heldin accordance with the Trust Deed shall be binding upon all the Covered Bondholders whetherpresent or not present at such meeting and whether or not voting and upon all Receiptholders andCouponholders and each of them shall be bound to give effect thereto accordingly and thepassing of any such resolution shall be conclusive evidence that the circumstances justify thepassing thereof. Notice of the result of the voting on any resolution duly considered by theCovered Bondholders shall be published in accordance with Condition 14 (Notices) by the Issuerwithin 14 days of such result being known PROVIDED THAT the non publication of suchnotice shall not invalidate such result.
20. The expression “Extraordinary Resolution” when used in the Trust Deed means (a) aresolution passed at a meeting of the Covered Bondholders duly convened and held inaccordance with terms of the Trust Deed by a majority consisting of not less than three fourths ofthe persons voting thereat upon a show of hands or if a poll is duly demanded by a majorityconsisting of not less than three fourths of the votes cast on such poll; or (b) a resolution inwriting signed by or on behalf of Covered Bondholders holding not less than 50 per cent. inPrincipal Amount Outstanding of the Covered Bonds, which resolution in writing may becontained in one document or in several documents in like form each signed by or on behalf ofone or more of the Covered Bondholders.
21. Minutes of all resolutions and proceedings at every meeting of the Covered Bondholdersshall be made and entered in books to be from time to time provided for that purpose by theIssuer and any such minutes as aforesaid if purporting to be signed by the Chairman of themeeting at which such resolutions were passed or proceedings transacted shall be conclusiveevidence of the matters therein contained and until the contrary is proved every such meeting inrespect of the proceedings of which minutes have been made shall be deemed to have been dulyheld and convened and all resolutions passed or proceedings transacted thereat to have been dulypassed or transacted.
22. (A) If and whenever the Issuer shall have issued and have outstanding Covered Bondsof more than one Series the foregoing provisions of this Schedule shall haveeffect subject to the following modifications:
(i) a resolution which in the opinion of the Bond Trustee affects the CoveredBonds of only one Series shall be deemed to have been duly passed ifpassed at a separate meeting of the holders of the Covered Bonds of thatSeries;
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(ii) a resolution which in the opinion of the Bond Trustee affects the CoveredBonds of more than one Series but does not give rise to a conflict ofinterest between the holders of Covered Bonds of any of the Series soaffected shall be deemed to have been duly passed if passed at a singlemeeting of the holders of the Covered Bonds of all the Series so affected;
(iii) a resolution which in the opinion of the Bond Trustee affects the CoveredBonds of more than one Series and gives or may give rise to a conflict ofinterest between the holders of the Covered Bonds of one Series or groupof Series so affected and the holders of the Covered Bonds of anotherSeries or group of Series so affected shall be deemed to have been dulypassed only if passed at separate meetings of the holders of the CoveredBonds of each Series or group of Series so affected;
(iv) a Programme Resolution shall be deemed to have been duly passed only ifpassed at a single meeting of the Covered Bondholders of all Series; and
(v) to all such meetings all the preceding provisions of this Schedule shallmutatis mutandis apply as though references therein to Covered Bonds andCovered Bondholders were references to the Covered Bonds of the Seriesor group of Series in question or to the holders of such Covered Bonds, asthe case may be.
(B) If the Issuer shall have issued and have outstanding Covered Bonds which are notdenominated in U.S.$ in the case of any meeting of holders of Covered Bonds ofmore than one currency (whether in respect of the meeting or any adjourned suchmeeting or any poll resulting therefrom) the Principal Amount Outstanding ofsuch Covered Bonds shall be the equivalent in U.S$ at the [rate set out in theapplicable Final Terms]. In such circumstances, on any poll each person presentshall have one vote for each U.S.$ 1,000 (or such other U.S.$ amount as the BondTrustee may in its absolute discretion stipulate) of the Principal AmountOutstanding of the Covered Bonds (converted as above) which he holds orrepresents.
23. Subject to all other provisions of the Trust Deed the Bond Trustee may without theconsent of the Issuer, the Guarantor, the Covered Bondholders, the Receiptholders or theCouponholders prescribe such further regulations regarding the requisitioning and/or the holdingof meetings of Covered Bondholders and attendance and voting thereat as the Bond Trustee mayin its sole discretion think fit.
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SCHEDULE 6N COVERED BONDS
PART 1FORM OF N COVERED BOND
N COVERED BOND (GEDECKTE NAMENSSCHULDVERSCHREIBUNG)
THIS SECURITY AND ANY GUARANTEE IN RESPECT THEREOF HAS NOT BEENAND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, ASAMENDED (THE “SECURITIES ACT”) OR ANY APPLICABLE U.S. STATESECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLDWITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.PERSONS.
THE N COVERED BOND IS NOT A TRANSFERABLE SECURITY WITHIN THEMEANING OF ART. 2 (1) LIT. (A) OF THE PROSPECTUS DIRECTIVE 2003/71/EC OFTHE EUROPEAN PARLIAMENT AND OF THE COUNCIL OF 4 NOVEMBER 2003, ASAMENDED, AND MAY ONLY BE OFFERED OR SOLD IN COMPLIANCE WITH ANYLEGISLATION WHICH IS APPLICABLE TO THE OFFERING AND SALE OF SUCHINSTRUMENTS WHERE THE OFFERING OR SALE TAKES PLACE. IN GERMANY,THE N COVERED BOND MAY IN PARTICULAR ONLY BE OFFERED OR SOLD INACCORDANCE WITH THE GERMAN CAPITAL INVESTMENTS ACT(VERMÖGENSANLAGENGESETZ).
National Bank of Canada(the “Issuer”)
(a Canadian chartered Bank)
SERIES [] N COVERED BOND (GEDECKTE NAMENSSCHULDVERSCHREIBUNG)
Principal Amount: [insert currency and principal amount](in words: [])
Issue Date: [insert date]
Final Maturity Date: [insert date]
[Extended Due for Payment Date under the Covered Bond Guarantee: [insert date]]
unconditionally and irrevocably guaranteed as to payments of interest and principal by
NBC Covered Bond (Legislative) Guarantor Limited Partnership(established under the Limited Partnerships Act (Ontario))
(the “Guarantor”)
This certificate evidences the Series [] N Covered Bond (gedeckte Namensschuldverschreibung)(the “N Covered Bond”) of National Bank of Canada having the provisions specified in [if theTerms and Conditions of the N Covered Bonds and the Final Terms are to be annexed: the Terms
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and Conditions of the N Covered Bonds as completed, modified, supplemented or replaced by thefinal terms relating to this N Covered Bond (the “Final Terms”), both as annexed hereto (the Termsand Conditions so supplemented, the “N Covered Bond Conditions”)] [if all of the blanks in allapplicable provisions of the Terms and Conditions will be completed or modified, supplemented orreplaced according to the information contained in the Final Terms and all non-applicableprovisions of the Terms and Conditions will be deleted: the Terms and Conditions annexed hereto(the “N Covered Bond Conditions”).]. Words and expressions defined or set out in the N CoveredBond Conditions shall have the same meaning when used in this certificate.
The Issuer shall pay to the registered holder of this N Covered Bond the amounts payable in respectthereof pursuant to the N Covered Bond Conditions. The Issuer hereby certifies that at the datehereof [insert name and complete address of bondholder] has been entered in the Register as theholder of this N Covered Bond in the aforesaid principal amount.
The rights arising out of this N Covered Bond as well as the title to this certificate only pass to a newHolder upon assignment and due registration thereof in the Register by the Registrar as further setout in the N Covered Bond Conditions. Only a holder so registered is entitled to receive payments inrespect of this N Covered Bond pursuant to the N Covered Bond Conditions.
This N Covered Bond shall not be valid unless authenticated by the Registrar.
IN WITNESS whereof this N Covered Bond has been executed on behalf of the Issuer.
Issued as of [ ].
National Bank of Canada
By: By:Duly Authorized Duly Authorized
Authenticated by one of the following:
[The Bank of New York Mellon (Luxembourg) S.A./ The Bank of New York Mellon]
as Registrar.
By:Authorized Officer
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PART 2TERMS AND CONDITIONS OF THE N COVERED BONDS
The following are the terms and conditions of the N Covered Bonds (the “Terms and Conditions”),which will be incorporated by reference into and (as completed by the applicable Final Terms inrelation to a Series of N Covered Bonds) apply to each Series of N Covered Bonds issued after thedate of this Trust Deed. The applicable Final Terms (or the relevant provisions thereof) will beendorsed upon, or attached to, the N Covered Bond.
This N Covered Bond is one of a Series (as defined below) of Covered Bonds issued by National
Bank of Canada (the “Issuer” or the “Bank”) as part of the Issuer’s U.S.$7 billion global CoveredBond programme (the “Programme”) and constituted by a Trust Deed dated the Programme Date(such trust deed as amended, supplemented or replaced, the “Trust Deed”) made between the Issuer,NBC Covered Bond (Legislative) Guarantor Limited Partnership, as guarantor (the “Guarantor”)and Computershare Trust Company of Canada, as bond trustee (in such capacity, the “BondTrustee” which expression shall include any successor as bond trustee).
The Covered Bonds have the benefit of an agency agreement dated the Programme Date (asamended, supplemented or replaced, the “Agency Agreement”) and made between the Issuer, theGuarantor, the Bond Trustee, The Bank of New York Mellon in its capacities as U.S. registrar (the“U.S. Registrar”, which expression shall include any successor in this capacity), transfer agent andexchange agent (the “U.S. Exchange Agent”, which expression shall include any successor in thiscapacity), The Bank of New York Mellon (Luxembourg) S.A., in its capacity as European registrar(the “European Registrar”, which expression shall include any successor in such capacity, and the“Registrar” or “Registrars” for a Tranche (as defined below)) shall be as specified in the applicableFinal Terms (as defined below) and as transfer agent, and The Bank of New York Mellon, LondonBranch, in its capacity as issuing and principal paying agent (the “Issuing and Paying Agent”, andwhich expression shall include any successor in such capacity), as exchange agent (the “EuropeanExchange Agent”, and collectively with the U.S. Exchange Agent, the “Exchange Agent”, whichexpression shall include any successor in such capacity) and as calculation agent (the “CalculationAgent”, which expression shall include any successor in such capacity and any substitute calculationagent appointed in accordance with the Agency Agreement either with respect to the Programme orwith respect to a particular Series) and as transfer agent and the other transfer agents named therein(collectively, the “Transfer Agent” which expression shall include any Registrar and any additionalor successor transfer agents), and the paying agents named therein (the “Paying Agents”, whichexpression shall include the Issuing and Paying Agent and any substitute or additional paying agentsappointed in accordance with the Agency Agreement either with respect to the Programme or withrespect to a particular Series). As used herein, “Agents” shall mean the Paying Agents, the Registraror Registrars, the Exchange Agent and the Transfer Agents.
References in these Terms and Conditions to “N Covered Bonds” are to any relevant Series of NCovered Bonds to which these Terms and Conditions are attached.
References in these Terms and Conditions (in particular in Conditions 7 and 13) to “Covered Bonds”are to all covered bonds issued by the Issuer under the Programme (including, for the avoidance ofdoubt, any N Covered Bonds).
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References in these Terms and Conditions to the Final Terms are to Part A of the Final Terms(s)prepared in relation to the relevant Series of N Covered Bonds.
In respect of any N Covered Bonds, references herein to these “Terms and Conditions” are to theseterms and conditions and any reference herein to a “Condition” is a reference to the relevantCondition of the Terms and Conditions of the relevant N Covered Bonds.
The N Covered Bonds are issued in series (each, a “Series”). Each Series will be the subject of FinalTerms (each, “Final Terms”) prepared in relation to such Series of N Covered Bonds
The Bond Trustee acts for the benefit of the holders for the time being of the Covered Bonds (the“holders of the Covered Bonds”, which expression shall, in relation to any Covered Bondsrepresented by a Global Covered Bond, be construed as provided below), the holders of the Receipts(the “Receiptholders”) and the holders of the Coupons (the “Couponholders”), and for holders ofeach other series of Covered Bonds in accordance with the provisions of the Trust Deed.
The Guarantor has, in the Trust Deed, irrevocably and unconditionally guaranteed the due andpunctual payment of the Guaranteed Amounts in respect of the Covered Bonds as and when thesame shall become due for payment on certain dates and in accordance with the Trust Deed (“Duefor Payment”), but only after the occurrence of a Covered Bond Guarantee Activation Event.
The security for the obligations of the Guarantor under the Covered Bond Guarantee and the otherTransaction Documents to which it is a party has been created in and pursuant to, and on the termsset out in, a security agreement (such security agreement as amended, supplemented or replaced the“Security Agreement”) dated the Programme Date and made between the Guarantor, the BondTrustee and certain other Secured Creditors.
These Terms and Conditions include summaries of and are subject to, the provisions of the TrustDeed, the Security Agreement, the Agency Agreement and the other Transaction Documents.
Copies of the Trust Deed, the Security Agreement, the Master Definitions and ConstructionAgreement (as defined below), the Agency Agreement and each of the other Transaction Documents(other than the Dealership Agreement and any subscription agreements) are available for inspectionduring normal business hours at the registered office for the time being of the Bond Trustee being atthe date of this Trust Deed at 1500 University Street, Suite 700, Montreal, Quebec, H3A 3S8 and atthe specified office of each of the Paying Agents. Copies of the applicable Final Terms of allCovered Bonds of each Series (including in relation to unlisted Covered Bonds of any Series) areobtainable during normal business hours of the specified office of each of the Paying Agents, andany holder of the Covered Bonds must produce evidence satisfactory to the Issuer and the BondTrustee or, as the case may be, relevant Paying Agent as to its holding of Covered Bonds andidentity. The holders of the Covered Bonds, the Receiptholders and Couponholders are deemed tohave notice of, or are bound by, and are entitled to the benefit of, all the provisions of, anddefinitions contained in, the Trust Deed, the Security Agreement, the Master Definitions andConstruction Agreement, the Agency Agreement, each of the other Transaction Documents (otherthan the Dealership Agreement and any subscription agreements) and the applicable Final Termswhich are applicable to them and to have notice of each set of Final Terms relating to each otherSeries.
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Except where the context otherwise requires, capitalized terms used or otherwise defined in theseTerms and Conditions shall bear the meanings given to them in the Master Definitions andConstruction Agreement made between the parties to the Transaction Documents on or about theProgramme Date (such master definitions and construction agreement as amended, supplemented orreplaced, the “Master Definitions and Construction Agreement”), a copy of each of which may beobtained as described above.
1. Form, Principal Amount and Currency
Form
1.01 Each N Covered Bond is issued in registered form as a German Namensschuldverschreibungand represented by a certificate which bears the manual signature of two duly authorised signatoriesof the Issuer and is manually authenticated by or on behalf of the Registrar.
The N Covered Bond is a Fixed Rate Covered Bond, a Floating Rate Covered Bond or a ZeroCoupon Covered Bond or any appropriate combination thereof, depending on the Interest Basisspecified in the applicable Final Terms. The N Covered Bond may also be an Instalment CoveredBond, if specified in the applicable Final Terms.
Principal Amount
1.02 N Covered Bonds are issued in the Principal Amount specified in the Final Terms.
Currency
1.03 The N Covered Bonds are denominated in such currency as may be specified in the FinalTerms (the “Specified Currency”). Any currency may be so specified, subject to compliance withall applicable legal and/or regulatory and/or central bank requirements.
2. Title and Transfer
2.01 The rights of the Holder arising from each N Covered Bond and title to the certificate itselfpass by assignment and registration in the Register. Except as ordered by a court of competentjurisdiction or as required by mandatory law, the Issuer, any applicable Agents and the Registrarshall deem and treat the registered Holder of any N Covered Bond as the absolute owner thereof andholder of the rights evidenced thereby.
2.02 The rights of the Holder arising from any N Covered Bond and title to the certificate itselfmay be transferred in whole or in part upon assignment of the relevant rights under the N CoveredBond by the then current Holder to the new Holder and the surrender of the certificate, together withthe duly completed and executed form of assignment agreement (which is attached to the certificate)at the specified office of the Registrar and the entry of the new Holder in the Register by theRegistrar. The date stated in the duly completed form of assignment agreement as the date, on whichthe economic effects of the assignments shall occur, shall be the “Transfer Date” to be entered intothe Register by the Registrar. Any transfer of part only of a N Covered Bond is permitted only for
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the minimum assignment amount (the “Minimum Assignment Amount”) specified in the relevantFinal Terms or an integral multiple thereof
2.03 If a N Covered has been allocated to the Holder's restricted assets (Sicherungsvermögen), theassignment agreement delivered to the Registrar must contain the consent of the trustee of the Holderor its deputy (Treuhänder für das Sicherungsvermögen) to the assignment (as provided in the formof assignment agreement).
2.04 In the case of a transfer of a N Covered Bond in whole and provided the requirementsspecified above have been met, a new certificate will be issued to the transferee with respect to the NCovered Bond upon request. In the case of a transfer of a part only of any N Covered Bond andprovided the requirements specified above have been met, new certificates in respect of the balancetransferred and the balance not transferred (as the case may be) will be issued to the transferor and tothe transferee respectively upon request.
2.05 Each new certificate to be issued upon transfer of a N Covered Bond (in whole or in part)will, within seven business days (being, for the purposes of this subsection, a day, other than aSaturday or Sunday, on which banks are open for business in the place of the specified office of theRegistrar) of submission of the certificate and the duly completed and executed form of assignmentagreement, be available for collection at the specified office of the Registrar or, at the request of theHolder making such submission and as specified in the relevant form of assignment agreement, bemailed at the risk of the Holder entitled to the new certificate by uninsured mail to such address asmay be specified in the form of assignment agreement.
2.06 Transfers of N Covered Bonds will be effected without charge by or on behalf of the Issueror the Registrar, but upon payment (or the giving of such indemnity as may be required from theIssuer or the Registrar) in respect of any tax or other duties which may be imposed in relation to it.
2.07 Any Holder may not require the transfer of a N Covered Bond to be registered during aperiod of 15 days ending on any due date for any payment of principal or interest. Any registrationof transfer required during such period shall be deemed to have been required on the business day (asreferred to in Condition 2.05 above) immediately following the last day of such period.
2.08 Any reference herein to a “N Covered Bond” includes, unless the context otherwise requires,any new N Covered Bond that has been issued upon transfer of any N Covered Bond or part thereof.In the event that the transfer of any N Covered N Bond in accordance with this Condition 2 results intwo or more new N Covered Bonds (the “Split”), the references to “N Covered Bond” and “Holder”and the other provisions of these Terms and Conditions shall apply mutatis mutandis to such NCovered Bonds. For the avoidance of doubt, following any Split, each Holder shall only be entitledpro rata temporis to payments under these Terms and Conditions. Any reference herein to “NCovered Bonds” in plural form shall constitute a reference to “N Covered Bond” in singular form.All grammatical and other changes required by the use of the word “N Covered Bond” in singularform shall be deemed to have been made herein and the provisions hereof shall be applied as if suchchanges had been made.
2.09 For the purposes of these Terms and Conditions:
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(a) “Holder” means the holder of a N Covered Bond registered in the Registermaintained by the Registrar. Any reference herein to Holder in plural form shallconstitute a reference to Holder in singular form.
(b) “Register” means the register maintained by the Registrar with respect to the NCovered Bonds.
3. Status of the N Covered Bonds
The N Covered Bonds constitute deposit liabilities of the Issuer for purposes of the Bank Act,however the N Covered Bonds will not be insured under the Canada Deposit Insurance CorporationAct (Canada), and will constitute legal, valid and binding direct, unconditional, unsubordinated andunsecured obligations of the Issuer and rank pari passu with all deposit liabilities of the Issuerwithout any preference among themselves and at least pari passu with all other unsubordinated andunsecured obligations of the Issuer, present and future (except as otherwise prescribed by law).Unless otherwise specified in the Final Terms, the deposits to be evidenced by the N Covered Bondswill be taken by the head office of the Issuer in Montréal, but without prejudice to the provisions ofCondition 9.
4. Guarantee
Payment of Guaranteed Amounts in respect of the N Covered Bonds when the same shall becomeDue for Payment has been unconditionally and irrevocably guaranteed by the Guarantor (the“Covered Bond Guarantee”) in favour of the Bond Trustee (for and on behalf of the CoveredBondholders) following a Covered Bond Guarantee Activation Event pursuant to the terms of theTrust Deed. The Guarantor shall have no obligation under the Covered Bond Guarantee to pay anyGuaranteed Amounts until a Covered Bond Guarantee Activation Event (as defined below) hasoccurred. The obligations of the Guarantor under the Covered Bond Guarantee are direct and,following the occurrence of a Covered Bond Guarantee Activation Event, unconditional and, exceptas provided in the Guarantee Priorities of Payment, unsubordinated obligations of the Guarantor,which are secured as provided in the Security Agreement. For the purposes of these Terms andConditions, a “Covered Bond Guarantee Activation Event” means the earlier to occur of (i) anIssuer Event of Default together with the service of an Issuer Acceleration Notice on the Issuer andthe service of a Notice to Pay on the Guarantor; and (ii) a Guarantor Event of Default together withthe service of a Guarantor Acceleration Notice on the Issuer and the Guarantor. If a Notice to Pay isserved on the Guarantor, the Guarantor shall pay Guaranteed Amounts in respect of the N CoveredBonds on the Original Due for Payment Dates or, if applicable, the Extended Due for Payment Date.
Any payment made by the Guarantor under the Covered Bond Guarantee shall (unless suchobligation shall have been discharged as a result of the payment of Excess Proceeds to the BondTrustee pursuant to Condition 7) discharge pro tanto the obligations of the Issuer in respect of suchpayment under the Covered Bonds, Receipts and Coupons except where such payment has beendeclared void, voidable or otherwise recoverable in whole or in part and recovered from the BondTrustee or the holders of the Covered Bonds.
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5. Interest
Interest
5.01 N Covered Bonds may be interest-bearing or non interest-bearing. The Interest Basis isspecified in the applicable Final Terms. Words and expressions appearing in this Condition 5 and nototherwise defined herein shall have the meanings given to them in Condition 5.09.
Interest on Fixed Rate Covered Bonds
5.02 Each Fixed Rate Covered Bond bears interest on its Outstanding Principal Amount from andincluding the Interest Commencement Date at the rate(s) per annum equal to the Rate(s) of Interest.Interest will be payable in arrears on the Interest Payment Date(s) in each year up to and includingthe Final Maturity Date if that does not fall on an Interest Payment Date.
Unless otherwise provided in the applicable Final Terms, the amount of interest payable on eachInterest Payment Date in respect of the Fixed Interest Period ending on, but excluding, such date willamount to the Fixed Coupon Amount. Payments of interest on any Interest Payment Date will, if sospecified in the applicable Final Terms, amount to the Broken Amount(s) so specified.
As used in these Terms and Conditions, “Fixed Interest Period” means the period from andincluding an Interest Payment Date (or the Interest Commencement Date) to but excluding the next(or first) Interest Payment Date.
Interest will be calculated on the Calculation Amount of the Fixed Rate Covered Bonds and will bepaid to the Holders of the N Covered Bonds. If interest is required to be calculated for a periodending other than on an Interest Payment Date, or if no Fixed Coupon Amount is specified in theapplicable Final Terms, such interest shall be calculated in accordance with Condition 5.08.
Notwithstanding anything else in this Condition 5.02, if an Extended Due for Payment Date isspecified in the Final Terms, interest following the Due for Payment Date will continue to accrueand be payable on any unpaid amount in accordance with Condition 5 at a Rate of Interestdetermined in accordance with Condition 5.03 (in the same manner as the Rate of Interest forFloating Rate Covered Bonds).
Interest on Floating Rate Covered Bonds
5.03 Interest Payment Dates
Each Floating Rate Covered Bond bears interest on its Outstanding Principal Amount from (andincluding) the Interest Commencement Date and such interest will be payable in arrears on either:
(a) the Specified Interest Payment Date(s) (each an “Interest Payment Date”) in eachyear specified in the applicable Final Terms; or
(b) if no Specified Interest Payment Date(s) is/are specified in the applicable FinalTerms, each date (each an “Interest Payment Date”) which falls the number of
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months or other period specified as the Specified Period in the applicable FinalTerms after the preceding Interest Payment Date or, in the case of the first InterestPayment Date, after the Interest Commencement Date.
Such interest will be payable in respect of each Interest Period (which expression, shall, in theseTerms and Conditions, mean the period from (and including) an Interest Payment Date (or theInterest Commencement Date) to (but excluding) the next (or first) Interest Payment Date). Interestwill be calculated on the Calculation Amount of the Floating Rate Covered Bonds and will be paid tothe Holders of the N Covered Bonds.
Rate of Interest
Where the Screen Rate Determination is specified in the applicable Final Terms as the manner inwhich the Rate of Interest is to be determined, the Rate of Interest for each Interest Period will bedetermined by the Calculation Agent on the following basis:
(a) the Calculation Agent will determine the Reference Rate (if there is only one quotation forthe Reference Rate on the Relevant Screen Page) or, as the case may require, the arithmeticmean (rounded, if necessary, to the nearest ten thousandth of a percentage point, 0.00005being rounded upwards) of the quotations for the Reference Rate in the relevant currency fora period of the duration of the relevant Interest Period on the Relevant Screen Page as of theRelevant Time on the relevant Interest Determination Date;
(b) if, on any Interest Determination Date, no rate so appears or, as the case may be, if fewerthan two quotations for the Reference Rate so appear on the Relevant Screen Page or if theRelevant Screen Page is unavailable, the Calculation Agent will request appropriatequotations of the Reference Rate and will determine the arithmetic mean (rounded asdescribed above) of the rates at which deposits in the relevant currency are offered by theReference Banks at approximately the Relevant Time on the Interest Determination Date toprime banks in the London interbank market in the case of LIBOR or in the Euro-zone (asdefined herein) interbank market in the case of EURIBOR for a period of the duration of therelevant Interest Period and in an amount that is representative for a single transaction in therelevant market at the relevant time;
(c) if, on any Interest Determination Date, only two or three rates are so quoted, the CalculationAgent will determine the arithmetic mean (rounded as described above) of the rates soquoted; or
(d) if fewer than two rates are so quoted, the Calculation Agent will determine the arithmeticmean (rounded as described above) of the rates for the Reference Rate quoted by four majorbanks in the Financial Centre as selected by the Calculation Agent, at approximately 11.00a.m. (Financial Centre time) on the first day of the relevant Interest Period for loans in therelevant currency to leading European banks for a period for the duration of the relevantInterest Period and in an amount that is representative for a single transaction in the relevantmarket at the relevant time,
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and the Rate of Interest applicable to such N Covered Bonds during each Interest Period willbe the sum of the Margin specified in the Final Terms and the Reference Rate or, as the casemay be, the arithmetic mean (rounded as described above) of the rates so determined,provided however that if the Calculation Agent is unable to determine a Reference Rate or,as the case may be, an arithmetic mean of rates in accordance with the above provisions inrelation to any Interest Period, the Rate of Interest applicable to such N Covered Bondsduring such Interest Period will be the sum of the Margin and the rate or, as the case may be,the arithmetic mean (rounded as described above) of the rates determined in relation to suchN Covered Bonds in respect of the last preceding Interest Period.
ISDA Rate Covered Bonds
5.04 Where ISDA Determination is specified in the Final Terms as the manner in which the Rateof Interest is to be determined, the Rate of Interest for each Interest Period will be the relevant ISDARate plus or minus (as indicated in the applicable Final Terms) the Margin, if any. For purposes ofthis Condition 5.04, “ISDA Rate” for an Interest Period means a rate equal to the Fixed Rates, FixedAmounts, Floating Rates or Floating Amounts, as the case may be, as set out in the applicable FinalTerms, as would have applied (regardless of any event of default or termination event or tax eventthereunder) if the Issuer had entered into a schedule and confirmation and credit support annex, ifapplicable, in respect of the relevant Series of N Covered Bonds, as applicable, with the Holder ofsuch N Covered Bond under the terms of an agreement to which the ISDA Definitions applied andunder which:
the Fixed Rate Payer, Fixed Amount Payer, Floating Rate Payer or, as the case may be,Floating Amount Payer is the Issuer (as specified in the Final Terms);
the Effective Date is the Interest Commencement Date;
the Floating Rate Option (which may refer to a Rate Option or a Price Option, specifiedin the ISDA Definitions) is as specified in the applicable Final Terms;
the Designated Maturity is the period specified in the applicable Final Terms;
the Agent is the Calculation Agent;
the Calculation Periods are the Interest Periods;
the Payment Dates are the Interest Payment Dates;
the relevant Reset Date is the day specified in the applicable Final Terms;
the Calculation Amount is the principal amount of such N Covered Bond;
the Day Count Fraction applicable to the calculation of any amount is that specified in theFinal Terms (which may be Actual/Actual, Actual/Actual (ISDA), Actual/365 (Fixed),Actual/360, 30E/360, Eurobond Basis, 30/360, 360/360, Bond Basis, 30E/360 (ISDA),
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Actual/Actual (ICMA) or Act/Act (ICMA)), or if none is so specified, as may bedetermined in accordance with the ISDA Definitions; and
the Business Day Convention applicable to any date is that specified in the Final Terms(which may be Following Business Day Convention, Modified Following Business DayConvention, Modified Business Day Convention, Preceding Business Day Convention,FRN Convention or Eurodollar Convention), or if none is so specified, as may bedetermined in accordance with the ISDA Definitions.
For the purposes of this Condition 5.04, “Floating Rate”, “Calculation Agent”, “Floating RateOption”, “Designated Maturity” and “Reset Date” have the meanings given to those terms in theISDA Definitions.
Maximum or Minimum Interest Rate
5.05 If any Maximum or Minimum Interest Rate is specified in the Final Terms, then the Rate ofInterest shall in no event be greater than the maximum or be less than the minimum so specified.
Accrual of Interest after the due date
5.06 Interest will cease to accrue as from the due date for redemption therefor (or, in the case of anInstalment Covered Bond, in respect of each Instalment Amount, on the due date for payment of therelevant Instalment Amount) unless upon due presentation or surrender thereof (if required),payment in full of the Final Redemption Amount or the relevant Instalment Amount is improperlywithheld or refused or default is otherwise made in the payment thereof. In such event, interest shallcontinue to accrue on the principal amount in respect of which payment has been improperlywithheld or refused or default has been made (as well after as before any demand or judgment) at theRate of Interest then applicable or such other rate as may be specified for this purpose in the FinalTerms if permitted by applicable law (“Default Rate”) until the date on which, upon duepresentation or surrender of the relevant N Covered Bond (if required), the relevant payment is madeor, if earlier (except where presentation or surrender of the relevant N Covered Bond is not requiredas a precondition of payment), the seventh day after the date on which, the Issuing and Paying Agentor, as the case may be, the Registrar having received the funds required to make such payment,notice is given to the Holders of the N Covered Bonds in accordance with Condition 14 that theIssuing and Paying Agent or, as the case may be, the Registrar has received the required funds(except to the extent that there is failure in the subsequent payment thereof to the relevant Holder).
Interest Amount(s), Calculation Agent and Reference Banks
5.07 If a Calculation Agent is specified in the Final Terms, the Calculation Agent, as soon aspracticable after the Relevant Time on each Interest Determination Date (or such other time on suchdate as the Calculation Agent may be required to calculate any Final Redemption Amount orInstalment Amount, obtain any quote or make any determination or calculation) will determine theRate of Interest and calculate the amount(s) of interest payable (the “Interest Amount(s)”) in themanner specified in Condition 5.08 below, calculate the Final Redemption Amount or InstalmentAmount, obtain such quote or make such determination or calculation, as the case may be, and causethe Rate of Interest and the Interest Amounts for each Interest Period and the relevant Interest
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Payment Date or, as the case may be, the Final Redemption Amount or any Instalment Amount to benotified to the Issuing and Paying Agent, the Registrar, the Issuer and the Holders in accordancewith Condition 14 as soon as possible after their determination or calculation but in no event laterthan the fourth London Banking Day thereafter. The Interest Amounts and the Interest Payment Dateso notified may subsequently be amended (or appropriate alternative arrangements made by way ofadjustment) without notice in the event of an extension or shortening of the Interest Period. If the NCovered Bonds become due and payable under Condition 7, the Rate of Interest and the accruedinterest payable in respect of the N Covered Bonds shall nevertheless continue to be calculated inaccordance with this Condition but no publication of the Rate of Interest or the Interest Amount socalculated need be made. The determination of each Rate of Interest, Interest Amount, FinalRedemption Amount and Instalment Amount, the obtaining of each quote and the making of eachdetermination or calculation by the Calculation Agent shall (in the absence of manifest error) be finaland binding upon the Issuer and the Holders and neither the Calculation Agent nor any ReferenceBank shall have any liability to the Holders in respect of any determination, calculation, quote or ratemade or provided by it.
The Issuer will procure that there shall at all times be such Reference Banks as may be required forthe purpose of determining the Rate of Interest applicable to the N Covered Bonds and a CalculationAgent, if provision is made for one in the Terms and Conditions.
If the Calculation Agent is incapable or unwilling to act as such or if the Calculation Agent fails dulyto establish the Rate of Interest for any Interest Period or to calculate the Interest Amounts or anyother requirements, the Bond Trustee shall determine the Rate of Interest at such rate as, in itsabsolute discretion (having regard as it shall think fit to the foregoing provision of this Condition,but subject always to any Minimum Rate of Interest or Maximum Rate of Interest specified in theapplicable Final Terms), it shall deem fair and reasonable in all circumstances or, as the case may be,the Bond Trustee shall calculate (or appoint an agent to calculate) the Interest Amount(s) in suchmanner as it shall deem fair and reasonable in all the circumstances and each such determination orcalculation shall be deemed to have been made by the Calculation Agent. The Calculation Agentmay not resign its duties without a successor having been appointed as described above.
Calculations and Adjustments
5.08 The amount of interest payable in respect of any N Covered Bond for any period shall becalculated by applying the Rate of Interest to the Calculation Amount, and, in each case, multiplyingsuch sum by the Day Count Fraction, save that if the Final Terms specifies a specific amount inrespect of such period, the amount of interest payable in respect of such N Covered Bond for suchInterest Period will be equal to such specified amount.
For the purposes of any calculations referred to in these Terms and Conditions, (a) all percentagesresulting from such calculations will be rounded, if necessary, to the nearest one hundred-thousandthof a percentage point (with 0.000005 per cent. being rounded up to 0.00001 per cent.), (b) allJapanese Yen amounts used in or resulting from such calculations will be rounded downwards to thenext lower whole Japanese Yen amount and (c) all amounts denominated in any other currency usedin or resulting from such calculations will be rounded to the nearest two decimal places in suchcurrency, with 0.005 being rounded upwards.
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Definitions
5.09 “Banking Day” means, in respect of any city, a day on which commercial banks are open forgeneral business (including dealings in foreign exchange and foreign currency deposits) in that city.
“Business Day” means (i) in relation to N Covered Bonds payable in other than euro, a day (otherthan a Saturday or Sunday) on which commercial banks and foreign exchange markets are open forgeneral business (including dealings in foreign exchange and foreign currency deposits) and settlepayments in the relevant currency in the Financial Centre(s) specified in the Final Terms or (ii) inrelation to N Covered Bonds payable in euro, a day (other than a Saturday or Sunday) which is aTARGET2 Business Day (as defined below) and on which commercial banks and foreign exchangemarkets are open for general business (including dealings in foreign exchange and foreign currencydeposits) in the Financial Centre(s) specified in the Final Terms.
“Business Day Convention” means a convention for adjusting any date if it would otherwise fall ona day that is not a Business Day and the following Business Day Conventions, where specified in theFinal Terms in relation to any date applicable to any N Covered Bonds, shall have the followingmeanings:
(a) “Following Business Day Convention” means that such date shall be postponed tothe first following day that is a Business Day;
(b) “Modified Following Business Day Convention” or “Modified Business DayConvention” means that such date shall be postponed to the first following day thatis a Business Day unless that day falls in the next calendar month in which case thatdate will be the first preceding day that is a Business Day;
(c) “Preceding Business Day Convention” means that such date shall be broughtforward to the first preceding day that is a Business Day; and
(d) “FRN Convention” or “Eurodollar Convention” means that each such date shall bethe date which numerically corresponds to the preceding such date in the calendarmonth which is the number of months specified in the Final Terms after the calendarmonth in which the preceding such date occurred, provided that:
(i) if there is no such numerically corresponding day in the calendar month inwhich any such date should occur, then such date will be the last day which isa Business Day in that calendar month;
(ii) if any such date would otherwise fall on a day which is not a Business Day,then such date will be the first following day which is a Business Day unlessthat day falls in the next calendar month, in which case it will be the firstpreceding day which is a Business Day; and
(iii) if the preceding such date occurred on the last day in a calendar month whichwas a Business Day, then all subsequent such dates will be the last day which
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is a Business Day in the calendar month which is the specified number ofmonths after the calendar month in which the preceding such date occurred.
“Calculation Agent” means the Issuing and Paying Agent or such other agent as may be specified inthe Final Terms as the Calculation Agent.
“Canadian Business Day” means a day (other than a Saturday or Sunday) on which commercialbanks are open for general business (including dealings in foreign exchange and foreign currencydeposits) in Toronto and Montréal.
“Day Count Fraction” means, in respect of the calculation of an amount for any period of time(each such period an “Accrual Period”), such day count fraction as may be specified in the FinalTerms and:
(a) if “Actual/Actual” or “Actual/Actual (ISDA)” is so specified, means the actual number ofdays in the Accrual Period divided by 365 (or, if any portion of the Accrual Period falls in aleap year, the sum of (A) the actual number of days in that portion of the Accrual Periodfalling in a leap year divided by 366 and (B) the actual number of days in that portion of theAccrual Period falling in a non-leap year divided by 365);
(b) if “Actual/365 (Fixed)” is so specified, means the actual number of days in the AccrualPeriod divided by 365;
(c) if “Actual/360” is so specified, means the actual number of days in the Accrual Perioddivided by 360;
(d) if “30E/360” or “Eurobond Basis” is specified in the applicable Final Terms, the number ofdays in the Interest Period divided by 360, calculated on a formula basis as follows:
Day CountFraction
= [360 x (Y2 - Y1)] + [30 x (M2 - M1)] + (D2 -D1)360
where:
“Y1” is the year, expressed as a number, in which the first day of the Interest Periodfalls;
“Y2” is the year, expressed as a number, in which the day immediately following thelast day included in the Interest Period falls;
“M1” is the calendar month, expressed as a number, in which the first day of theInterest Period falls;
“M2” is the calendar month, expressed as a number, in which the day immediatelyfollowing the last day included in the Interest Period falls;
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“D1” is the first calendar day, expressed as a number, of the Interest Period, unlesssuch number would be 31, in which case D1 will be 30; and
“D2” is the calendar day, expressed as a number, immediately following the last dayincluded in the Interest Period, unless such number would be 31, in which case D2,will be 30.
(e) if “30/360”, “360/360” or “Bond Basis” is specified in the applicable Final Terms,the number of days in the Interest Period divided by 360, calculated on a formulabasis as follows:
Day CountFraction
= [360 x (Y2 - Y1)] + [30 x (M2 - M1)] + (D2 -D1)360
where:
“Y1” is the year, expressed as a number, in which the first day of the Interest Periodfalls;
“Y2” is the year, expressed as a number, in which the day immediately following thelast day included in the Interest Period falls;
“M1” is the calendar month, expressed as a number, in which the first day of theInterest Period falls;
“M2” is the calendar month, expressed as number, in which the day immediatelyfollowing the last day included in the Interest Period falls;
“D1” is the first calendar day, expressed as a number, of the Interest Period, unlesssuch number would be 31, in which case D1 will be 30; and
“D2” is the calendar day, expressed as a number, immediately following the last dayincluded in the Interest Period, unless such number would be 31 and D1 is greaterthan 29, in which case D2 will be 30; and
(f) if “30E/360 (ISDA)” is so specified, means the number of days in the Accrual Perioddivided by 360, calculated on a formula basis as follows:
Day CountFraction
= [360 x (Y2 - Y1)] + [30 x (M2 - M1)] + (D2 -D1)360
where:
“Y1” is the year, expressed as a number, in which the first day of the Accrual Periodfalls;
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“Y2” is the year, expressed as a number, in which the day immediately following thelast day included the Accrual Period falls;
“M1” is the calendar month, expressed as a number, in which the first day of theAccrual Period falls;
“M2” is the calendar month, expressed as a number, in which the day immediatelyfollowing the last day included in the Accrual Period falls;
“D1” is the first calendar day, expressed as a number, of the Accrual Period, unless(i) that day is the last day of February or (ii) such number would be 31, in which caseD1 will be 30; and
“D2” is the calendar day, expressed as a number, immediately following the last dayincluded in the Accrual Period, unless (i) that day is the last day of February but notthe Final Maturity Date or (ii) such number would be 31, in which case D2 will be30; and
(g) if “Actual/Actual (ICMA)” or “Act/Act (ICMA)” is specified in the applicableFinal Terms, a fraction equal to “number of days accrued/number of days in year”, assuch terms are used in Rule 251 of the statutes, by-laws, rules and recommendationsof the International Capital Market Association (the “ICMA Rule Book”), calculatedin accordance with Rule 251 of the ICMA Rule Book as applied to non U.S. dollardenominated straight and convertible bonds issued after December 31, 1998, asthough the interest coupon on a bond were being calculated for a coupon periodcorresponding to the Interest Period.
“Determination Date” means such dates as specified in the applicable Final Terms.
“Determination Period” means the period from and including a Determination Date in any year tobut excluding the next Determination Date (including, where either the Interest CommencementDate or the final Interest Payment Date is not a Determination Date, the period commencing on thefirst Determination Date prior to, and ending on the first Determination Date falling after, such date).
“Euro-zone” means the region comprised of those member states of the European Unionparticipating in the European Monetary Union from time to time.
“Financial Centre” means such financial centre or centres as may be specified in relation to therelevant currency for the purposes of the definition of “Business Day” in the ISDA Definitions orindicated in the Final Terms or, in the case of N Covered Bonds denominated in euro, such financialcentre or centres as the Calculation Agent may select.
“Interest Commencement Date” means the date of issue (the “Issue Date”) of the N CoveredBonds (as specified in the Final Terms) or such other date as may be specified as such in the FinalTerms.
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“Interest Determination Date” means, in respect of any Interest Period, the date falling suchnumber (if any) of Banking Days in such city(ies) as may be specified in the Final Terms prior to thefirst day of such Interest Accrual Period, or if none is specified:
(a) in the case of N Covered Bonds denominated in Pounds Sterling or in another currency if sospecified in the applicable Final Terms, the first day of such Interest Period; or
(b) in any other case, the date falling two London Banking Days (or, in the case of EURIBOR orEUROLIBOR, two TARGET2 Business Days) prior to the first day of such Interest AccrualPeriod.
“Interest Payment Date” means the date or dates specified as such in the Final Terms and, as thesame may be adjusted in accordance with the Business Day Convention, if any, specified in the FinalTerms or if the Business Day Convention is the FRN Convention and an interval of a number ofcalendar months is specified in the Final Terms as being the Interest Period, each of such dates asmay occur in accordance with the FRN Convention at such specified period of calendar monthsfollowing the Issue Date of the N Covered Bonds (in the case of the first Interest Payment Date) orthe previous Interest Payment Date (in any other case).
“Interest Period” means each successive period beginning on and including an Interest PaymentDate and ending on but excluding the next succeeding Interest Payment Date, provided always thatthe first Interest Period shall commence on and include the Interest Commencement Date and thefinal Interest Period shall end on but exclude the Final Maturity Date.
“Interest Period End Date” means the date or dates specified as such in, or determined inaccordance with the provisions of, the Final Terms and, as the same may be adjusted in accordancewith the Business Day Convention, if any, specified in the Final Terms or, if the Business DayConvention is the FRN Convention and an interval of a number of calendar months is specified inthe Final Terms as the Interest Accrual Period, such dates as may occur in accordance with the FRNConvention at such specified period of calendar months following the Interest Commencement Date(in the case of the first Interest Period End Date) or the previous Interest Period End Date (in anyother case) or, if none of the foregoing is specified in the Final Terms, means the date or each of thedates which correspond with the Interest Payment Date(s) in respect of the N Covered Bonds.
“ISDA Definitions” means the 2006 ISDA Definitions (as amended, supplemented and updated asat the date of issue of the N Covered Bonds of the relevant Series (as specified in the Final Terms) aspublished by the International Swaps and Derivatives Association, Inc.).
“Outstanding Principal Amount” means, in respect of a N Covered Bond, its principal amountless, in respect of any Instalment Covered Bond, any principal amount on which interest shall haveceased to accrue in accordance with Condition 5.06 or otherwise as indicated in the Final Terms.
“Rate of Interest” means the rate or rates (expressed as a percentage per annum) or amount oramounts (expressed as a price per unit of relevant currency) of interest payable in respect of the NCovered Bonds specified in, or calculated or determined in accordance with the provisions of, theFinal Terms.
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“Reference Banks” means such banks as may be specified in the Final Terms as the ReferenceBanks, or, if none are specified, “Reference Banks” has the meaning given in the ISDA Definitions,mutatis mutandis.
“Reference Rate” means the relevant LIBOR or EURIBOR rate specified in the applicable FinalTerms.
“Relevant Time” means the time as of which any rate is to be determined as specified in the FinalTerms (which in the case of LIBOR means London time or in the case of EURIBOR means CentralEuropean Time) or, if none is specified, at which it is customary to determine such rate.
“Reuters Screen” means, when used in connection with a designated page and any designatedinformation, the display page so designated on the Reuters Market 3000 (or such other page as mayreplace that page on that service for the purpose of displaying such information).
“TARGET2 Business Day” means, a day in which the TARGET2 System is open.
Zero-Coupon Covered Bonds
5.10 If any Final Redemption Amount in respect of any Zero Coupon Covered Bond is not paidwhen due, interest shall accrue on the overdue amount at a rate per annum (expressed as apercentage per annum) equal to the Amortization Yield defined in the Final Terms or at such otherrate as may be specified for this purpose in the Final Terms until the date on which, upon duepresentation or surrender of the relevant N Covered Bond (if required), the relevant payment is madeor, if earlier (except where presentation or surrender of the relevant N Covered Bond is not requiredas a precondition of payment), the seventh day after the date on which, the Issuing and Paying Agentor, as the case may be, the Registrar having received the funds required to make such payment,notice is given to the Holders of the N Covered Bonds in accordance with Condition 14 that theIssuing and Paying Agent or, as the case may be, the Registrar has received the required funds(except to the extent that there is failure in the subsequent payment thereof to the relevant Holder).The amount of any such interest shall be calculated in accordance with the provisions of Condition5.08 as if the Rate of Interest was the Amortization Yield, the Outstanding Principal Amount was theoverdue sum and the Day Count Fraction was as specified for this purpose in the Final Terms or, ifnot so specified, 30E/360 (as defined in Condition 5.09).
6. Redemption and Purchase
6.01 Unless previously redeemed, or purchased and cancelled or unless such N Covered Bond isstated in the Final Terms as having no fixed maturity date, this N Covered Bond shall be redeemed atits Final Redemption Amount specified in the applicable Final Terms in the Specified Currency onthe Final Maturity Date.
Without prejudice to Condition 7, if an Extended Due for Payment Date is specified as applicable inthe Final Terms for a Series of N Covered Bonds and the Issuer has failed to pay the FinalRedemption Amount on the Final Maturity Date specified in the Final Terms (or after expiry of thegrace period set out in Condition 7.01(a)) and, following service of a Notice to Pay on the Guarantorby no later than the date falling one Business Day prior to the Extension Determination Date, the
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Guarantor has insufficient moneys available in accordance with the Guarantee Priority of Paymentsto pay in full the Guaranteed Amounts corresponding to the Final Redemption Amount of therelevant Series of N Covered Bonds on the date falling on the earlier of (a) the date which falls twoBusiness Days after service of such Notice to Pay on the Guarantor or, if later, the Final MaturityDate (or, in each case, after the expiry of the grace period set out in Condition 7.02) under the termsof the Covered Bond Guarantee or (b) the Extension Determination Date, then (subject as providedbelow) payment of the unpaid amount by the Guarantor under the Covered Bond Guarantee shall bedeferred until the Extended Due for Payment Date, provided that in respect of any amountrepresenting the Final Redemption Amount due and remaining unpaid on the earlier of (a) and (b)above, the Guarantor will apply any moneys available (after paying or providing for payment ofhigher ranking or pari passu amounts in accordance with the Guarantee Priority of Payments) to paythe Guaranteed Amounts corresponding to the Final Redemption Amount of the relevant Series of NCovered Bonds on any Interest Payment Date thereafter up to (and including) the relevant ExtendedDue for Payment Date.
The Issuer shall confirm to the Issuing and Paying Agent as soon as reasonably practicable and inany event at least 4 Business Days prior to the Final Maturity Date of a Series of N Covered Bondswhether payment will be made in full of the Final Redemption Amount in respect of such Series ofN Covered Bonds on that Final Maturity Date. Any failure by the Issuer to notify the Issuing andPaying Agent shall not affect the validity or effectiveness of the extension of maturity.
The Guarantor shall notify the relevant holders of the N Covered Bonds (in accordance withCondition 14), the Rating Agencies, the Bond Trustee, the Issuing and Paying Agent and theRegistrar as soon as reasonably practicable and in any event at least one Business Day prior to thedates specified in (a) and (b) of the second paragraph of this Condition 6.01 of any inability of theGuarantor to pay in full the Guaranteed Amounts corresponding to the Final Redemption Amount inrespect of a Series of N Covered Bonds pursuant to the Covered Bond Guarantee. Any failure by theGuarantor to notify such parties shall not affect the validity or effectiveness of the extension nor giverise to any rights in any such party.
In the circumstances outlined above, the Guarantor shall on the earlier of (a) the date falling twoBusiness Days after the service of a Notice to Pay on the Guarantor or if later the Final MaturityDate (or, in each case, after the expiry of the applicable grace period set out in Condition 7.02) and(b) the Extension Determination Date, under the Covered Bond Guarantee, apply the moneys (if any)available (after paying or providing for payment of higher ranking or pari passu amounts inaccordance with the Guarantee Priority of Payments) pro rata in part payment of an amount equal tothe Final Redemption Amount of each N Covered Bond of the relevant Series of N Covered Bondsand shall pay Guaranteed Amounts constituting the Scheduled Interest in respect of each such NCovered Bond on such date. The obligation of the Guarantor to pay any amounts in respect of thebalance of the Final Redemption Amount not so paid shall be deferred as described above. Suchfailure to pay by the Guarantor shall not constitute a Guarantor Event of Default.
Any discharge of the obligations of the Issuer as the result of the payment of Excess Proceeds to theBond Trustee shall be disregarded for the purposes of determining the amounts to be paid by theGuarantor under the Covered Bond Guarantee in connection with this Condition 6.01.
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For the purposes of these Terms and Conditions:
“Extended Due for Payment Date” means, in relation to any Series of N Covered Bonds, the date,if any, specified as such in the applicable Final Terms to which the payment of all or (as applicable)part of the Final Redemption Amount payable on the Final Maturity Date will be deferred in theevent that the Final Redemption Amount is not paid in full on the Extension Determination Date;and
“Extension Determination Date” means, in respect of a Series of N Covered Bonds, the date fallingtwo Business Days after the expiry of seven days from (and including) the Final Maturity Date ofsuch N Covered Bonds.
“Guarantee Priority of Payments” means the priority of payments relating to moneys received bythe Cash Manager for and on behalf of the Guarantor and moneys standing to the credit of theGuarantor Accounts, to be paid on each Guarantor Payment Date in accordance with the GuarantorAgreement.
“Rating Agency” means any one of Moody’s Investors Service, Inc., Fitch Ratings, Inc. and DBRSLimited, to the extent that at the relevant time they provide ratings in respect of the then outstandingCovered Bonds, or their successors and “Rating Agencies” means more than one Rating Agency.
Early Redemption for Taxation Reasons
6.02 If, in relation to any Series of N Covered Bonds (i) as a result of any amendment to,clarification of, or change including any announced proposed change in the laws or regulations, orthe application or interpretation thereof of Canada or the United Kingdom or any politicalsubdivision thereof or any authority or agency therein or thereof having power to tax or, in the caseof N Covered Bonds issued by a branch of the Issuer outside Canada, of the country in which suchbranch is located or of any political subdivision thereof or any authority or agency therein or thereofhaving power to tax or in the interpretation or administration of any such laws or regulations whichbecomes effective on or after the Issue Date of such N Covered Bonds or any other date specified inthe Final Terms, (ii) any judicial decision, administrative pronouncement, published or privateruling, regulatory procedure, rule, notice, announcement, assessment or reassessment (including anynotice or announcement of intent to adopt or issue such decision, pronouncement, ruling, procedure,rule, notice, announcement, assessment or reassessment) (collectively, an “administrative action”);or (iii) any amendment to, clarification of, or change in, the official position with respect to or theinterpretation of any administrative action or any interpretation or pronouncement that provides for aposition with respect to such administrative action that differs from the theretofore generallyaccepted position, in each of case (i), (ii) or (iii), by any legislative body, court, governmentalauthority or agency, regulatory body or taxing authority, irrespective of the manner in which suchamendment, clarification, change, administrative action, interpretation or pronouncement is madeknown, which amendment, clarification, change or administrative action is effective or whichinterpretation, pronouncement or administrative action is announced on or after the date of issue ofthe N Covered Bonds, there is more than an insubstantial risk (assuming any proposed or announcedamendment, clarification, change, interpretation, pronouncement or administrative action is effectiveand applicable) the Issuer would be required to pay additional amounts as provided in Condition 8,
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and such circumstances are evidenced by the delivery by the Issuer to the Issuing and Paying Agentand Bond Trustee of (x) a certificate signed by two senior officers of the Issuer stating that the saidcircumstances prevail and describing the facts leading thereto, and (y) an opinion of independentlegal advisers of recognised standing to the effect that the circumstances set forth in (i), (ii) or (iii)above prevail, the Issuer may, at its option and having given no less than 30 nor more than 60 days’notice (ending, in the case of Floating Rate Covered Bonds, on an Interest Payment Date) to theHolders of the N Covered Bonds in accordance with Condition 14 (which notice shall beirrevocable), redeem all (but not some only) of the outstanding N Covered Bonds at theirOutstanding Principal Amount or, in the case of Zero Coupon Covered Bonds, their Amortized FaceAmount (as defined in Condition 6.10) or such Early Redemption Amount as may be specified in, ordetermined in accordance with the provisions of, the Final Terms, together with accrued interest (ifany) thereon, provided, however, that no such notice of redemption may be given earlier than 90days (or, in the case of Floating Rate Covered Bonds a number of days which is equal to theaggregate of the number of days falling within the then current Interest Period plus 60 days) prior tothe earliest date on which the Issuer would be obliged to pay such additional amounts were apayment in respect of the N Covered Bonds then due.
The Issuer may not exercise such option in respect of any N Covered Bond which is the subject ofthe prior exercise by the Holder thereof of its option to require the redemption of such N CoveredBond under Condition 6.06.
Call Option
6.03 If a Call Option is specified in the Final Terms as being applicable, then the Issuer may,having given the appropriate notice to the Holders in accordance with Condition 14, which Noticeshall be irrevocable, and shall specify the date fixed for redemption, redeem all or some only of theN Covered Bonds of this Series outstanding on any Optional Redemption Date at the OptionalRedemption Amount(s) specified in, or determined in the manner specified in the applicable FinalTerms together with accrued interest (if any) thereon on the date specified in such notice.
The Issuer may not exercise such option in respect of any N Covered Bond which is the subject ofthe prior exercise by the Holder thereof of its option to require the redemption of such N CoveredBond under Condition 6.06.
6.04 The appropriate notice referred to in Condition 6.03 is a notice given by the Issuer to theHolders of the N Covered Bonds of the relevant Series in accordance with Condition 14, whichnotice shall be irrevocable and shall specify:
the Series of N Covered Bonds subject to redemption;
whether such Series is to be redeemed in whole or in part only and, if in part only, theaggregate principal amount of and the serial numbers of the N Covered Bonds of therelevant Series which are to be redeemed;
the due date for such redemption, which shall be not less than thirty days nor more than60 days after the date on which such notice is given and which shall be such date or the
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next of such dates (“Call Option Date(s)”) or a day falling within such period (“CallOption Period”), as may be specified in the Final Terms and which is, in the case of NCovered Bonds which bear interest at a floating rate, a date upon which interest ispayable; and
the Optional Redemption Amount at which such N Covered Bonds are to be redeemed.
Partial Redemption
6.05 If the N Covered Bonds are to be redeemed in part only on any date in accordance withCondition 6.03, the N Covered Bonds shall be redeemed (so far as may be practicable) pro rata totheir principal amounts.
In the case of the redemption of part only of a N Covered Bond, a new N Covered Bond in respect ofthe unredeemed balance shall be issued in accordance with Conditions 2.02 to 2.08, which shallapply as in the case of a transfer of N Covered Bonds as if such new N Covered Bond were inrespect of the untransferred balance.
Put Option
6.06 If a Put Option is specified in the Final Terms as being applicable, upon the Holder of any NCovered Bond of this Series giving the required notice to the Issuer specified in the applicable FinalTerms (which notice shall be irrevocable), the Issuer will, upon expiry of such notice, redeem such NCovered Bond subject to and in accordance with the terms specified in the applicable Final Terms inwhole (but not in part only) on the Optional Redemption Date and at the Optional RedemptionAmount specified in, or determined in accordance with the provisions of, the applicable Final Terms,together with accrued interest (if any) thereon. In order to exercise such option, the Holder must, notless than 45 days before the Optional Redemption Date deposit the N Covered Bond during normalbusiness hours at the specified office of the Registrar together with a duly completed earlyredemption notice (“Put Notice”) in the form which is available from the specified office of theRegistrar. No N Covered Bond so deposited and option exercised may be withdrawn (except asprovided in the Agency Agreement).
In the case of the redemption of part only of a N Covered Bond, a new N Covered Bond in respect ofthe unredeemed balance shall be issued in accordance with Condition 2 which shall apply as in thecase of a transfer of N Covered Bonds as if such new N Covered Bond were in respect of theuntransferred balance.
The Holder of a N Covered Bond may not exercise such Put Option (i) in respect of any N CoveredBond which is the subject of an exercise by the Issuer of its option to redeem such N Covered Bondunder either Condition 6.02 or 6.03, or (ii) following an Issuer Event of Default.
Purchase of N Covered Bonds
6.07 The Issuer or any of its subsidiaries may at any time, but will at no time be obligated to,purchase Covered Bonds in the open market or otherwise and at any price. If purchases are made bytender, tenders must be available to all Holders of the relevant N Covered Bonds alike.
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Cancellation of Redeemed and Purchased Covered Bonds
6.08 All unmatured N Covered Bonds redeemed in accordance with this Condition 6 will becancelled forthwith and may not be reissued or resold.
Further Provisions applicable to Redemption Amount and Instalment Amount
6.09 The provisions of Condition 5.07 and the last paragraph of Condition 5.08 shall apply to anydetermination or calculation of the Redemption Amount or any Instalment Amount required by theFinal Terms to be made by the Calculation Agent (as defined in Condition 5.09).
References herein to “Redemption Amount” shall mean, as appropriate, the Final RedemptionAmount, final Instalment Amount, the Optional Redemption Amount, the Early RedemptionAmount or such other amount in the nature of a redemption amount as may be specified in, ordetermined in accordance with, the provisions of the applicable Final Terms.
6.10 In the case of any Zero Coupon Covered Bond, the “Amortized Face Amount” shall be anamount equal to the sum of:
(a) the Issue Price specified in the Final Terms; and
(b) the product of the Amortization Yield (compounded annually) being applied to theIssue Price from (and including) the Issue Date specified in the Final Terms to (butexcluding) the date fixed for redemption or (as the case may be) the date upon whichsuch N Covered Bond becomes due and repayable.
Where such calculation is to be made for a period which is not a whole number of years, thecalculation in respect of the period of less than a full year shall be made on the basis of the DayCount Fraction (as defined in Condition 5.09) specified in the Final Terms.
6.11 If any Redemption Amount (other than the Final Redemption Amount) is improperlywithheld or refused or default is otherwise made in the payment thereof, the Amortized FaceAmount shall be calculated as provided in Condition 6.10 but as if references in subparagraph (b) tothe date fixed for redemption or the date upon which such Zero Coupon Covered Bond becomes dueand repayable were replaced by references to the earlier of:
(a) the date on which, upon due presentation or surrender of the relevant N CoveredBond (if required), the relevant payment is made; and
(b) (except where presentation or surrender of the relevant N Covered Bond is notrequired as a precondition of payment), the seventh day after the date on which, theIssuing and Paying Agent or, as the case may be, the Registrar having received thefunds required to make such payment, notice is given to the Holders of the NCovered Bonds in accordance with Condition 14 of that circumstance (except to theextent that there is a failure in the subsequent payment thereof to the relevantHolder).
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Instalment Covered Bonds
6.12 Any Instalment Covered Bond will be redeemed in the Instalment Amounts and on theInstalment Dates specified in the applicable Final Terms.
Redemption due to Illegality
6.13 The N Covered Bonds of all Series may be redeemed at the option of the Issuer in whole, butnot in part, at any time, on giving not less than 30 nor more than 60 days’ notice to the Bond Trustee,the Issuing and Paying Agent, the Registrar and, in accordance with Condition 14, all holders of theN Covered Bonds (which notice shall be irrevocable), if the Issuer satisfies the Bond Trusteeimmediately before the giving of such notice that it has, or will, before the next Interest PaymentDate of any N Covered Bond of any Series, become unlawful for the Issuer to make, fund or allow toremain outstanding any advance made by it to the Guarantor pursuant to the Intercompany LoanAgreement, as a result of any change in, or amendment to, the applicable laws or regulations or anychange in the application or official interpretation of such laws or regulations, which change oramendment has become or will become effective before the next such Interest Payment Date.
Covered Bonds redeemed pursuant to this Condition 6.13 will be redeemed at their EarlyRedemption Amount together (if appropriate) with interest accrued to (but excluding) the date ofredemption.
Prior to the publication of any notice of redemption pursuant to this Condition 6.13, the Issuer shalldeliver to the Issuing and Paying Agent and Bond Trustee a certificate signed by two senior officersof the Issuer stating that the Issuer is entitled to effect such redemption and setting forth a statementof facts showing that the conditions precedent to the right of the Issuer so to redeem have occurredand the Issuing and Paying Agent and Bond Trustee shall be entitled to accept the certificate assufficient evidence of the satisfaction of the conditions precedent set out above, in which event itshall be conclusive and binding on all holders of the N Covered Bonds.
7. Events of Default
Issuer Events of Default
7.01 The Bond Trustee at its discretion may, and if so requested in writing by the holders of atleast 25 per cent. of the aggregate Principal Amount Outstanding of the Covered Bonds (which forthis purpose or the purpose of any Extraordinary Resolution (as defined in the Trust Deed) referredto in this Condition 7.01 means the Covered Bonds of this Series together with the Covered Bonds ofany other Series constituted by the Trust Deed) then outstanding as if they were a single Series (withthe nominal amount of Covered Bonds not denominated in U.S. dollars converted into U.S. dollars atthe applicable Covered Bond Swap Rate) or if so directed by an Extraordinary Resolution of all theholders of the Covered Bonds shall, (but in the case of the happening of any of the events mentionedin subparagraphs (b) to (f) below, only if the Bond Trustee shall have certified in writing to theIssuer and the Guarantor, that such event is, in its opinion, materially prejudicial to the interests ofthe holders of the Covered Bonds of any Series) (subject in each case to being indemnified and/orsecured to its satisfaction), give notice (an “Issuer Acceleration Notice”) in writing to the Issuerthat as against the Issuer (but, for the avoidance of doubt, not against the Guarantor under the
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Covered Bond Guarantee) each Covered Bond of each Series is, and each such Covered Bond shallthereupon immediately become, due and repayable at its Early Redemption Amount together withaccrued interest as provided in the Trust Deed if any of the following events (each, an “Issuer Eventof Default”) shall occur and be continuing:
(a) the Issuer fails to pay any principal or interest in respect of the Covered Bonds within10 Business Days in the case of principal and 30 days in the case of interest, in eachcase of the respective due date; or
(b) the Issuer fails to perform or observe any obligations under the Covered Bonds,Receipts or Coupons of any Series, the Trust Deed or any other TransactionDocument (other than the Dealership Agreement and any subscription agreement forthe Covered Bonds) to which the Issuer is a party (other than any obligation of theIssuer to comply with the Asset Coverage Test and any other obligation of the Issuerspecifically provided for in this Condition 7.01) and such failure continues for aperiod of 30 days (or such longer period as the Bond Trustee may permit) nextfollowing the service by the Bond Trustee on the Issuer of notice requiring the sameto be remedied (except in circumstances where the Bond Trustee considers suchfailure to be incapable of remedy in which case no period of continuation will applyand no notice by the Bond Trustee will be required); or
(c) an Insolvency Event in respect of the Issuer; or
(d) an Asset Coverage Test Breach Notice has been served and not revoked (inaccordance with the terms of the Transaction Documents) on or before the GuarantorPayment Date immediately following the next Calculation Date after service of suchAsset Coverage Test Breach Notice; or
(e) if the Pre-Maturity Test in respect of any Series of Hard Bullet Covered Bonds isbreached less than six months prior to the Final Maturity Date of that Series of HardBullet Covered Bonds, and the Guarantor has not cured the breach before the earlierto occur of: (i) ten Canadian Business Days from the date that the Seller is notified ofthe breach of the Pre-Maturity Test and (ii) the Final Maturity Date of that Series ofHard Bullet Covered Bonds; or
(f) if a ratings trigger prescribed by the Conditions or the Transaction Documents (andnot otherwise specifically provided for in this Condition 7.01) is breached and theprescribed remedial action is not taken within the specified time period, unless, inrespect of any ratings trigger other than the Account Bank Threshold Ratings, theStandby Account Bank Threshold Ratings, the Cash Management Deposit Ratingsand the Servicer Deposit Threshold Ratings, such breach occurs at a time that theGuarantor is Independently Controlled and Governed.
For the purposes of these Terms and Conditions “Calculation Date” means the last CanadianBusiness Day of each month.
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Upon the Covered Bonds becoming immediately due and repayable against the Issuer pursuant tothis Condition 7.01, the Bond Trustee shall forthwith serve a notice to pay (the “Notice to Pay”) onthe Guarantor pursuant to the Covered Bond Guarantee and the Guarantor shall be required to makepayments of Guaranteed Amounts when the same shall become Due for Payment in accordance withthe terms of the Covered Bond Guarantee.
Following the occurrence of an Issuer Event of Default and service of an Issuer Acceleration Notice,the Bond Trustee may or shall take such proceedings against the Issuer in accordance with the firstparagraph of Condition 7.03.
The Trust Deed provides that all moneys (the “Excess Proceeds”) received by the Bond Trusteefrom the Issuer or any receiver, liquidator, administrator or other similar official appointed inrelation to the Issuer following the occurrence of an Issuer Event of Default and service of an IssuerAcceleration Notice, shall be paid by the Bond Trustee, as soon as practicable after receipt thereofby the Bond Trustee, on behalf of the holders of the Covered Bonds of the relevant Series to theGuarantor (or the Cash Manager on its behalf) for the account of the Guarantor and shall be held inthe Guarantor Accounts and the Excess Proceeds shall thereafter form part of the Security grantedpursuant to the Security Agreement and shall be used by the Guarantor (or the Cash Manager on itsbehalf) in the same manner as all other moneys from time to time held by the Cash Manager and/orstanding to the credit of the Guarantor in the Guarantor Accounts. Any Excess Proceeds received bythe Bond Trustee shall discharge pro tanto the obligations of the Issuer in respect of the payment ofthe amount of such Excess Proceeds under the Covered Bonds, Receipts and Coupons. However, theobligations of the Guarantor under the Covered Bond Guarantee are, following a Covered BondGuarantee Activation Event, unconditional and irrevocable and the receipt by the Bond Trustee ofany Excess Proceeds shall not reduce or discharge any of such obligations.
By subscribing for Covered Bonds, each holder of the Covered Bonds shall be deemed to haveirrevocably directed the Bond Trustee to pay the Excess Proceeds to the Guarantor in the manner asdescribed above.
Guarantor Events of Default
7.02 The Bond Trustee at its discretion may, and if so requested in writing by the holders of atleast 25 per cent. of the aggregate Principal Amount Outstanding of the Covered Bonds (which forthis purpose and the purpose of any Extraordinary Resolution referred to in this Condition 7.02means the Covered Bonds of this Series together with the Covered Bonds of any other Seriesconstituted by the Trust Deed) then outstanding as if they were a single Series (with the nominalamount of Covered Bonds not denominated in U.S. dollars converted into U.S. dollars at theapplicable Covered Bond Swap Rate) or if so directed by an Extraordinary Resolution of all theholders of the Covered Bonds shall (but in the case of the happening of any of the events describedin paragraphs (b) to (f) below, only if the Bond Trustee shall have certified in writing to the Issuerand the Guarantor that such event is, in its opinion, materially prejudicial to the interests of theholders of the Covered Bonds of any Series) (subject in each case to being indemnified and/orsecured to its satisfaction) give notice (the “Guarantor Acceleration Notice”) in writing to theIssuer and the Guarantor, that (x) each Covered Bond of each Series is, and each Covered Bond ofeach Series shall as against the Issuer (if not already due and repayable against it following an Issuer
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Event of Default), thereupon immediately become, due and repayable at its Early RedemptionAmount together with accrued interest and (y) all amounts payable by the Guarantor under theCovered Bond Guarantee shall thereupon immediately become due and payable at the GuaranteedAmount corresponding to the Early Redemption Amount for each Covered Bond of each Seriestogether with accrued interest, in each case as provided in the Trust Deed and thereafter the Securityshall become enforceable if any of the following events (each, a “Guarantor Event of Default”)shall occur and be continuing:
(a) default is made by the Guarantor for a period of seven days or more in the paymentof any Guaranteed Amounts when Due for Payment in respect of the Covered Bondsof any Series, except in the case of the payment of a Guaranteed Amount when Duefor Payment under Condition 6.01 where the Guarantor shall be required to makepayments of Guaranteed Amounts which are Due for Payment on the dates specifiedtherein; or
(b) if default is made by the Guarantor in the performance or observance of anyobligation, condition or provision binding on it (other than any obligation for thepayment of Guaranteed Amounts in respect of the Covered Bonds of any Series andany other obligation specifically provided for in this Condition 7.02) under the TrustDeed, the Security Agreement or any other Transaction Document (other than theobligation of the Guarantor to (i) repay the Demand Loan pursuant to the terms of theIntercompany Loan Agreement, or (ii) make a payment under a Swap Agreement if ithas insufficient funds therefor) to which the Guarantor is a party and, except wheresuch default is or the effects of such default are, in the opinion of the Bond Trustee,not capable of remedy when no such continuation and notice as is hereinaftermentioned will be required, such default continues for 30 days (or such longer periodas the Bond Trustee may permit) after written notice thereof has been given by theBond Trustee to the Guarantor requiring the same to be remedied; or
(c) an Insolvency Event in respect of the Guarantor; or
(d) a failure to satisfy the Amortization Test on any Calculation Date following theoccurrence and during the continuance of an Issuer Event of Default; or
(e) the Covered Bond Guarantee is not, or is claimed by the Guarantor not to be, in fullforce and effect; or
(f) if a ratings trigger prescribed by the Conditions or the Transaction Documents (andnot otherwise specifically provided for in this Condition 7.02) is breached and theprescribed remedial action is not taken within the specified time period, unless, inrespect of any ratings trigger other than the Account Bank Threshold Ratings, theStandby Account Bank Threshold Ratings, the Cash Management Deposit Ratingsand the Servicer Deposit Threshold Ratings, such breach occurs at a time that theGuarantor is Independently Controlled and Governed.
Following the occurrence of a Guarantor Event of Default and service of a Guarantor AccelerationNotice on the Guarantor, the Bond Trustee may or shall take such proceedings or steps in accordance
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with the first and second paragraphs, respectively, of Condition 7.03 and the holders of the CoveredBonds shall have a claim against the Guarantor, under the Covered Bond Guarantee, for an amountequal to the Early Redemption Amount together with accrued but unpaid interest and any otheramount due under the Covered Bonds (other than additional amounts payable under Condition 8) asprovided in the Trust Deed in respect of each Covered Bond.
Enforcement
7.03 The Bond Trustee may at any time, at its discretion and without further notice, take suchproceedings against the Issuer and/or the Guarantor, as the case may be, and/or any other person as itmay think fit to enforce the provisions of the Trust Deed, the Covered Bonds, the Receipts, theCoupons and any other Transaction Document, but it shall not be bound to take any suchenforcement proceedings in relation to the Trust Deed, the Covered Bonds, the Receipts or theCoupons or any other Transaction Document unless (i) it shall have been so directed by anExtraordinary Resolution of all the holders of the Covered Bonds of all Series (with the CoveredBonds of all Series taken together as a single Series as described above) or so requested in writing bythe holders of not less than 25 per cent. of the aggregate Principal Amount Outstanding of theCovered Bonds of all Series then outstanding (taken together and converted into U.S. dollars at theapplicable Covered Bond Swap Rate) and (ii) it shall have been indemnified and/or secured to itssatisfaction.
The Bond Trustee may at any time, at its discretion and without further notice, take such proceedingsagainst the Guarantor and/or any other person as it may think fit to enforce the provisions of theSecurity Agreement and may, at any time after the Security has become enforceable, take such stepsas it may think fit to enforce the Security, but it shall not be bound to take any such steps unless (i) itshall have been so directed by an Extraordinary Resolution of all the holders of the Covered Bondsof all Series (with the Covered Bonds of all Series taken together as a single Series as describedabove) or a request in writing by the holders of not less than 25 per cent. of the aggregate PrincipalAmount Outstanding of the Covered Bonds of all Series then outstanding (taken together andconverted into U.S. dollars at the applicable Covered Bond Swap Rate); and (ii) it shall have beenindemnified and/or secured to its satisfaction.
In exercising any of its powers, trusts, authorities and discretions the Bond Trustee shall, subject toapplicable law, only have regard to the interests of the holders of the Covered Bonds of all Seriesand shall not have regard to the interests of any other Secured Creditors.
No holder of the Covered Bonds, Receiptholder or Couponholder shall be entitled to proceed directlyagainst the Issuer or the Guarantor or to take any action with respect to the Trust Deed, the CoveredBonds, the Receipts, the Coupons, or the Security unless the Bond Trustee, having become bound soto proceed, fails so to do within a reasonable time and such failure shall be continuing.
8. Taxation
8.01 All amounts payable (whether in respect of principal, interest or otherwise) in respect of theN Covered Bonds, will be paid free and clear of and without withholding or deduction for or onaccount of any present or future taxes, duties, assessments or governmental charges of whatevernature imposed or levied by or on behalf of Canada, any province or territory or political subdivision
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thereof or any authority or agency therein or thereof having power to tax or, in the case of NCovered Bonds issued by a branch of the Issuer located outside Canada, the country in which suchbranch is located or any political subdivision thereof or any authority or agency therein or thereofhaving power to tax, unless the withholding or deduction of such taxes, duties, assessments orgovernmental charges is required by law or the interpretation or administration thereof. In that event,the Issuer will pay such additional amounts as may be necessary in order that the net amountsreceived by the Holder after such withholding or deduction shall equal the respective amounts ofprincipal and interest which would have been received in respect of the N Covered Bonds, in theabsence of such withholding or deduction; except that no additional amounts shall be payable withrespect to any payment in respect of any N Covered Bond:
(a) to, or to a third party on behalf of, a Holder who is liable for such taxes, duties,assessments or governmental charges in respect of such N Covered Bond by reasonof his having some connection with Canada or the country in which such branch islocated (for these purposes “connection” includes but is not limited to any present orformer connection between such holder (or between a fiduciary, seller, beneficiary,member or shareholder of, or possessor of power over such holder if such holder isan estate, trust, partnership, limited liability company or corporation) and suchjurisdiction) otherwise than the mere holding of (but not the enforcement of) such NCovered Bond; or
(b) to, or to a third party on behalf of, a Holder in respect of whom such tax, duty,assessment or governmental charge is required to be withheld or deducted by reasonof the Holder or other person entitled to payments under the N Covered Bonds beinga person with whom the Issuer is not dealing at arm’s length (within the meaning ofthe Income Tax Act (Canada)); or
(c) where such withholding or deduction is imposed on a payment to an individual and isrequired to be made pursuant to European Council Directive 2003/48/EC or anyother Directive implementing the conclusions of the ECOFIN council meeting of 26-27 November 2000 on the taxation of savings income or any law implementing orcomplying with, or introduced in order to conform to, such Directives; or
(d) presented for payment by or on behalf of a Holder who would be able to avoid suchwithholding or deduction by presenting the relevant N Covered Bond to anotherPaying Agent in a member state of the European Union; or
(e) presented for payment more than 30 days after the Relevant Date except to the extentthat the Holder thereof would have been entitled to such additional amount onpresenting the same for payment on the thirtieth such day; or
(f) to, or to a third party on behalf of, a Holder who is liable for such taxes, duties,assessments or other governmental charges by reason of such Holder’s failure tocomply with any certification, identification, documentation or other reportingrequirement concerning the nationality, residence, identity or connection withCanada or the country in which such branch is located of such Holder, if (i)
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compliance is required by law as a precondition to, exemption from, or reduction inthe rate of, the tax, assessment or other governmental charge and (ii) the Issuer hasgiven Holders at least 30 days’ notice that Holders will be required to provide suchcertification, identification, documentation or other requirement; or
(g) in respect of any estate, inheritance, gift, sales, transfer, personal property or anysimilar tax, duty, assessment or governmental charge; or
(h) where any combination of items (a) - (g) applies;
nor will such additional amounts be payable with respect to any payment in respect of the N CoveredBonds to a holder that is a fiduciary or partnership or to any person other than the sole beneficialowner of such N Covered Bond to the extent that the beneficiary or seller with respect to suchfiduciary, or member of such partnership or beneficial owner thereof would not have been entitled toreceive a payment of such additional amounts had such beneficiary, seller, member or beneficialowner received directly its beneficial or distributive share of such payment.
For the purposes of this Condition 8.01, the term “Holder” shall be deemed to refer to the beneficialholder for the time being of the N Covered Bonds.
8.02 For the purposes of these Terms and Conditions, the “Relevant Date” means, in respect ofany N Covered Bond, the date on which payment thereof first become due and payable, or, if the fullamount of the moneys payable has not been received by the Issuing and Paying Agent, or as the casemay be, the Registrar on or prior to such due date, the date on which, the full amount of such moneysshall have been so received and notice to that effect shall have been duly given to the Holders inaccordance with Condition 14.
8.03 If the Issuer and/or the Guarantor become subject generally at any time to any taxingjurisdiction other than or in addition to Canada or the country in which the relevant branch of theIssuer is located, references in Condition 6.02, Condition 8.01 and Condition 8.05, as applicable, toCanada or the country in which the relevant branch is located shall be read and construed asreferences to Canada or the country in which such branch is located and/or to such otherjurisdiction(s).
8.04 Any reference in these Terms and Conditions to any payment due in respect of the NCovered Bonds shall be deemed to include any additional amounts which may be payable under thisCondition 8. Unless the context otherwise requires, any reference in these Terms and Conditions to“principal” shall include any premium payable in respect of a N Covered Bond, any InstalmentAmount or Final Redemption Amount, any Excess Proceeds which may be payable by the BondTrustee under or in respect of the N Covered Bond and any other amounts in the nature of principalpayable pursuant to these Terms and Conditions and “interest” shall include all amounts payablepursuant to Condition 5 and any other amounts in the nature of interest payable pursuant to theseTerms and Conditions.
8.05 Should any payments made by the Guarantor under the Covered Bond Guarantee be madesubject to any withholding or deduction for or on account of taxes or duties of whatever natureimposed or levied by or on account of Canada, any province or territory, political subdivision thereof
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or by any authority or agency therein or thereof having power to tax, or, in the case of paymentsmade by the Guarantor under the Covered Bond Guarantee in respect of N Covered Bonds issued bya branch of the Issuer located outside of Canada, the country in which such branch is located or anypolitical subdivision thereof or by any authority or agency therein or thereof having the power to tax,the Guarantor will not be obliged to pay any additional amounts as a consequence.
9. Payments
9.01 Subject to Condition 9.02 below, payments of principal and interest in respect of N CoveredBonds will be made on the respective due date by transfer to the Designated Account (as definedbelow) of the Holder appearing in the Register at the close of the business on the fifteenth businessday (being for this purpose a day on which banks are open for business in the city where theSpecified Office of the Registrar is located) before the relevant due date (the “Record Date”). Forthis purpose “Designated Account” means the account (which, in case of payment in Japanese Yento a non resident of Japan, shall be a non resident account) maintained by the Holder with aDesignated Bank and which has been notified to the Registrar no later than the Record Date and“Designated Bank” means in the case of payment in a Specified Currency (other than euro) a bankin the principal financial centre of the country of such Specified Currency and (in the case ofpayment in euro) any bank which processes payments in euro.
9.02 If the relevant Final Terms specify that “Partial Interest Upon Transfer(s)” is applicable, inthe case of a transfer of a N Covered Bond (in whole or in part) occurring during any Fixed InterestPeriod, payment of interest on the N Covered Bond or, in the case of a transfer in part on a pro ratabasis, on the resulting N Covered Bonds, shall be made on the respective due date thereof to (i) theassignor of the N Covered Bond for the period from and including the last Interest Payment Date orthe Interest Commencement Date, as the case may be, to but excluding the relevant Transfer Dateand (ii) the assignee appearing in the Register as the new Holder on the Record Date, for the periodfrom and including the relevant Transfer Date to but excluding the relevant Interest Payment Date,and (iii) if more than one assignment of the N Covered Bond occurs during one Interest Period, toeach Holder, with respect to the period of its holding of the N Covered Bond, for the period from andincluding each relevant Transfer Date to but excluding the respective next following Transfer Date.This Condition 9.02 shall not apply if the relevant Final Terms specify that “Eurobond Interest UponTransfer(s)” is applicable.
9.03 Payments will, without prejudice to the provisions of Condition 8, be subject in all cases to(i) any applicable fiscal or other laws and regulations and (ii) FATCA.
9.04 The relevant Holder shall without undue delay surrender any N Covered Bond to the Issueror the Registrar upon payment of principal and interest, if any, in full.
9.05 If the due date for payment of any amount in respect of any N Covered Bond is not aPayment Day, the Holder thereof shall not be entitled to payment until the next following PaymentDay in the relevant place and shall not be entitled to any further interest or other payment in respectof such delay.
9.06 In the case of an inclusion of any N Covered Bond in the restricted assets of the Holderwithin the meaning of § 66 German Insurance Supervisory Act (Versicherungsaufsichtsgesetz), any
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payments due under the relevant N Covered Bond may be withheld (without interest payablethereon) until the trustee of the Holder or its deputy appointed in accordance with § 70 GermanInsurance Supervisory Act (Treuhänder für da Sicherungsvermögen) has given its consent pursuantto § 72 German Insurance Supervisory Act that any payments due under the N Covered Bond maybe made with discharging effect to the account notified by the Holder or another account notified bythe trustee or its deputy (as provided for in the form of notification attached each N Covered Bond).
9.07 For the purposes of these Terms and Conditions:
“Payment Day” means (a) in the case of any currency other than euro, a day on whichcommercial banks are open for general business (including dealings in foreign exchange andforeign currency deposits) and foreign exchange markets settle payments in the FinancialCentre(s) specified in the Final Terms or (b) in the case of payment in euro, a day which is aTARGET2 Business Day and on which commercial banks and foreign exchange markets areopen for general business (including dealings in foreign exchange and foreign currencydeposits) in the Financial Centre(s) specified in the Final Terms.
9.08 No commissions or expenses shall be charged to the Holders of N Covered Bonds in respectof such payments.
10. Prescription and Counterclaims
Prescription
10.01 Claims against the Issuer for payment in respect of any amount due under any N CoveredBond shall be prescribed and become void unless made within ten (10) years (in the case ofprincipal) or five (5) years (in the case of interest) from the appropriate Relevant Date in respect ofthem.
Counterclaims
10.02 If so specified in the applicable Final Terms, the Issuer waives any right of set-off against theclaims arising from a N Covered Bond as well as the exercise of any pledge, right of retention orother rights through which the claims of the Holder could be prejudiced:
(a) as long as and to the extent that such claims form part of the restricted assets(gebundenes Vermögen) within the meaning of § 54 of the German Act Concerningthe Supervision of Insurance Companies (Gesetz über die Beaufsichtigung derVersicherungsunternehmen - Versicherungsaufsichtsgesetz) or the N Covered Bondis being held by a German professional pension fund (Versorgungswerk);
(b) as long as and to the extent that such claims belong to funds which serve as cover(Deckungswerte) for Pfandbriefe issued pursuant to the German Pfandbrief Act(Pfandbriefgesetz) or other domestic covered bonds legislation; or
(c) as otherwise set out in the Final Terms.
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The same applies mutatis mutandis in the event of composition or insolvency proceedings.
11. The Paying Agent, the Registrar and the Calculation Agent
11.01 The initial Paying Agent, the Registrar and, as the case may be, the Calculation Agent andtheir respective initial specified offices are specified in the applicable Final Terms. The Issuer andthe Guarantor each reserves the right, without approval of the Bond Trustee, at any time to vary orterminate the appointment of the Paying Agent, the Registrar or the Calculation Agent and to appointadditional or other Paying Agents or another Registrar or Calculation Agent provided that the Issuerand the Guarantor will at all times maintain (i) a Registrar, (ii) a Paying Agent with a specified officein a continental European city and (iii) a Paying Agent in a member state of the European Union thatis not obliged to withhold or deduct tax pursuant to European Council Directive 2003/48/EC or anyother Directive implementing the conclusions of the ECOFIN council meeting of 26-27 November2000 on the taxation of savings income or any law implementing or complying with, or introduced inorder to conform to, such Directives and (iv) a Calculation Agent where required by the Terms andConditions applicable to any N Covered Bond. The Agents, the Registrar and the Calculation Agentreserve the right at any time to change their respective specified offices to some other specifiedoffice in the same metropolitan area. Notice of all changes in the identities or specified offices of anyAgent, the Registrar or the Calculation Agent will be given promptly by the Issuer or the Guarantorto the Holders in accordance with Condition 14.
11.02 The Agents, the Registrar and the Calculation Agent act solely as agents of the Issuer and theGuarantor and, in certain circumstances of the Bond Trustee, and save as provided in the AgencyAgreement or any other agreement entered into with respect to its appointment, do not assume anyobligations towards or relationship of agency or trust for any Holder of any N Covered Bond andeach of them shall only be responsible for the performance of the duties and obligations expresslyimposed upon it in the Agency Agreement or other agreement entered into with respect to itsappointment or incidental thereto.
12. Replacement of the certificate relating to a N Covered Bond
If the certificate representing any N Covered Bond is lost, stolen, mutilated, defaced or destroyed, itmay be replaced at the specified office of the Registrar upon payment by the applicant of such costsand expenses as may be incurred in connection therewith and on such terms as to evidence andindemnity as the Issuer may reasonably require. A mutilated or defaced certificate must besurrendered before a replacement certificate will be issued. .
13. Meetings of Holders of the Covered Bonds, Modification and Waiver
The Trust Deed contains provisions for convening meetings of the holders of the Covered Bonds toconsider any matter affecting their interests, including the modification by Extraordinary Resolutionof these Terms and Conditions or the provisions of the Trust Deed. The quorum at any such meetingin respect of any Covered Bonds of any Series for passing an Extraordinary Resolution is one ormore persons holding or representing not less than a clear majority of the aggregate PrincipalAmount Outstanding of the Covered Bonds of such Series for the time being outstanding, or at anyadjourned meeting one or more persons being or representing holders of the Covered Bondswhatever the nominal amount of the Covered Bonds of such Series so held or represented, except
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that at any meeting the business of which includes the modification of any Series Reserved Matter(as defined below), the quorum shall be one or more persons holding or representing not less thantwo-thirds of the aggregate Principal Amount Outstanding of the Covered Bonds of such Series forthe time being outstanding, or at any adjourned such meeting one or more persons holding orrepresenting not less than one third of the aggregate Principal Amount Outstanding of the CoveredBonds of such Series for the time being outstanding. An Extraordinary Resolution passed at anymeeting of the holders of the Covered Bonds of a Series shall, subject as provided below, be bindingon all the holders of the Covered Bonds of such Series, whether or not they are present at themeeting, and on all Receiptholders and Couponholders in respect of such Series of Covered Bonds.Pursuant to the Trust Deed, the Bond Trustee may convene a single meeting of the holders ofCovered Bonds of more than one Series if in the opinion of the Bond Trustee there is no conflictbetween the holders of such Covered Bonds, in which event the provisions of this paragraph shallapply thereto mutatis mutandis.
Notwithstanding the provisions of the immediately preceding paragraph, any ExtraordinaryResolution to direct the Bond Trustee to accelerate the Covered Bonds pursuant to Condition 7 or todirect the Bond Trustee to take any enforcement action (a “Programme Resolution”) shall only becapable of being passed at a single meeting of the holders of the Covered Bonds of all Series thenoutstanding. Any such meeting to consider a Programme Resolution may be convened by the Issuer,the Guarantor or the Bond Trustee or by holders of the Covered Bonds of any Series. The quorum atany such meeting for passing a Programme Resolution is one or more persons holding orrepresenting at least a clear majority of the aggregate Principal Amount Outstanding of the CoveredBonds of all Series for the time being outstanding or at any adjourned such meeting one or morepersons holding or representing Covered Bonds whatever the nominal amount of the Covered Bondsof any Series so held or represented. A Programme Resolution passed at any meeting of the holdersof the Covered Bonds of all Series shall be binding on all holders of the Covered Bonds of all Series,whether or not they are present at the meeting, and on all related Receiptholders and Couponholdersin respect of such Series of Covered Bonds.
In connection with any meeting of the holders of Covered Bonds of more than one Series theCovered Bonds of any Series not denominated in U.S. dollars shall be converted into U.S. dollars atthe applicable Covered Bond Swap Rate.
The Bond Trustee, the Guarantor and the Issuer may also agree, without the consent of the holders ofthe Covered Bonds, Receiptholders or Couponholders of any Series and without the consent of theother Secured Creditors (and for this purpose the Bond Trustee may disregard whether any suchmodification relates to a Series Reserved Matter), to:
(a) any modification of the Covered Bonds of one or more Series, the related Receiptsand/or Coupons or any Transaction Document provided that in the opinion of theBond Trustee such modification is not materially prejudicial to the interests of any ofthe holders of the Covered Bonds of any Series; or
(b) any modification of the Covered Bonds of any one or more Series, the relatedReceipts and/or Coupons or any Transaction Document which is of a formal, minor
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or technical nature or is in the opinion of the Bond Trustee made to correct amanifest error or to comply with mandatory provisions of law.
The Bond Trustee may also agree, without the consent of the holders of the Covered Bonds of anySeries, the related Receiptholders and/or Couponholders, to the waiver or authorization of anybreach or proposed breach of any of the provisions of the Covered Bonds of any Series, ordetermine, without any such consent as described above, that any Issuer Event of Default orGuarantor Event of Default or Potential Issuer Event of Default or Potential Guarantor Event ofDefault shall not be treated as such, provided that, in any such case, it is not, in the opinion of theBond Trustee, materially prejudicial to the interests of any of the holders of the Covered Bonds ofany Series.
Any such modification, waiver, authorization or determination shall be binding on all holders of theCovered Bonds of all Series of Covered Bonds for the time being outstanding, the relatedReceiptholders and the Couponholders and the other Secured Creditors, and unless the Bond Trusteeotherwise agrees, any such modification shall be notified by the Issuer to the holders of the CoveredBonds of all Series of Covered Bonds for the time being outstanding and the other Secured Creditorsin accordance with the relevant terms and conditions as soon as practicable thereafter.
In connection with the exercise by it of any of its trusts, powers, authorities and discretions(including, without limitation, any modification, waiver, authorization or determination), the BondTrustee shall have regard to the general interests of the holders of the Covered Bonds of each Seriesas a class (but shall not have regard to any interests arising from circumstances particular toindividual holders of the Covered Bonds, Receiptholders or Couponholders whatever their number)and, in particular but without limitation, shall not have regard to the consequences of any suchexercise for individual holders of the Covered Bonds, the related Receiptholders, Couponholders(whatever their number) resulting from their being for any purpose domiciled or resident in, orotherwise connected with, or subject to the jurisdiction of, any particular territory or any politicalsubdivision thereof and the Bond Trustee shall not be entitled to require, nor shall any holder of theCovered Bonds, Receiptholder or Couponholder be entitled to claim, from the Issuer, the Guarantor,the Bond Trustee or any other person any indemnification or payment in respect of any taxconsequences of any such exercise upon individual holders of the Covered Bonds, Receiptholdersand/or Couponholders, except to the extent already provided for in Condition 8 and/or in anyundertaking or covenant given in addition to, or in substitution for, Condition 8 pursuant to the TrustDeed.
For the purposes of these Terms and Conditions:
“Potential Issuer Event of Default” means any condition, event or act which, with the lapse of timeand/or the issue, making or giving of any notice, certification, declaration, demand, determinationand/or request and/or the taking of any similar action and/or the fulfilment of any similar condition,would constitute an Issuer Event of Default;
“Potential Guarantor Event of Default” means any condition, event or act which, with the lapse oftime and/or the issue, making or giving of any notice, certification, declaration, demand,
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determination and/or request and/or the taking of any similar action and/or the fulfilment of anysimilar condition, would constitute a Guarantor Event of Default; and
“Series Reserved Matter” in relation to Covered Bonds of a Series means: (i) reduction orcancellation of the amount payable or, where applicable, modification of the method of calculatingthe amount payable or modification of the date of payment or, where applicable, modification of themethod of calculating the date of payment in respect of any principal or interest in respect of theCovered Bonds; (ii) alteration of the currency in which payments under the Covered Bonds, Receiptsand Coupons are to be made; (iii) alteration of the majority required to pass an ExtraordinaryResolution; (iv) any amendment to the Covered Bond Guarantee or the Security Agreement (exceptin a manner determined by the Bond Trustee not to be materially prejudicial to the interests of theholders of the Covered Bonds of any Series); (v) except in accordance with Condition 12, thesanctioning of any such scheme or proposal for the exchange or sale of the Covered Bonds for or theconversion of the Covered Bonds into, or the cancellation of the Covered Bonds in consideration of,shares, stock, covered bonds, bonds, debentures, debenture stock and/or other obligations and/orsecurities of the Issuer or any other company formed or to be formed, or for or into or inconsideration of cash, or partly for or into or in consideration of such shares, stock, bonds, coveredbonds, debentures, debenture stock and/or other obligations and/or securities as described above andpartly for or into or in consideration of cash and for the appointment of some person with power onbehalf of the holders of the Covered Bonds to execute an instrument of transfer of the RegisteredCovered Bonds held by them in favour of the persons with or to whom the Covered Bonds are to beexchanged or sold respectively; and (vi) alteration of specific sections of the Trust Deed relating tothe quorum and procedure required for meetings of holders of Covered Bonds.
14. Notices
Notices to the Holders of N Covered Bonds may be given by first class mail (or equivalent) or, ifposted to an overseas address, by air mail to it at its address as recorded in the Register. Notices willbe deemed to have been validly given on the fourth weekday after the date of such mailing or, ifposted from another country, on the fifth such day.
15. Further Issues
The Issuer may from time to time, without the consent of the Holders of any N Covered Bond, createand issue further N Covered Bonds having the same terms and conditions as such N Covered Bondin all respects (or in all respects except for the first payment of interest, if any, on them and/or thedenomination thereof).
16. Currency Indemnity
The currency in which the N Covered Bonds are denominated or, if different, payable, as specified inthe Final Terms (the “Contractual Currency”), is the sole currency of account and payment for allsums payable by the Issuer in respect of the N Covered Bonds, including damages. Any amountreceived or recovered in a currency other than the Contractual Currency (whether as a result of, or ofthe enforcement of, a judgement or order of a court of any jurisdiction or otherwise) by any Holderof a N Covered Bond in respect of any sum expressed to be due to it from the Issuer shall onlyconstitute a discharge to the Issuer to the extent of the amount in the Contractual Currency which
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such Holder is able to purchase with the amount so received or recovered in that other currency onthe date of that receipt or recovery (or, if it is not practicable to make that purchase on that date, onthe first day on which it is practicable to do so). If that amount is less than the amount in theContractual Currency expressed to be due to any Holder of a N Covered Bond the Issuer shallindemnify such Holder against any loss sustained by such Holder as a result. In any event, the Issuershall indemnify each such Holder against any cost of making such purchase which is reasonablyincurred. These indemnities constitute a separate and independent obligation from the Issuer’s otherobligations, shall give rise to a separate and independent cause of action, shall apply irrespective ofany indulgence granted by any Holder of a N Covered Bond and shall continue in full force andeffect despite any judgement, order, claim or proof for a liquidated amount in respect of any sum duein respect of the N Covered Bonds or any judgement or order. Any such loss shall be deemed toconstitute a loss suffered by the relevant Holder of a N Covered Bond and no proof or evidence ofany actual loss will be required by the Issuer.
17. Waiver and Remedies
No failure to exercise, and no delay in exercising, on the part of the Holder of any N Covered Bond,any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereofpreclude any other or future exercise thereof or the exercise of any other right. Rights hereundershall be in addition to all other rights provided by law. No notice or demand given in any case shallconstitute a waiver of rights to take other action in the same, similar or other instances without suchnotice or demand.
18. Branch of Account
18.01 For the purposes of the Bank Act, the branch of the Bank set out in this N Covered Bond orthe Final Terms shall be the branch of account (the “Branch of Account”) for the depositsevidenced by this N Covered Bond.
18.02 This N Covered Bond will be paid without the necessity of first being presented for paymentat the Branch of Account.
18.03 If the Branch of Account is not in Canada, the Bank may change the Branch of Account forthe deposits evidenced by this N Covered Bond, upon not less than seven days’ prior notice to itsHolder given in accordance with Condition 14 and upon and subject to the following terms andconditions:
(a) if this N Covered Bond is denominated in Yen, the Branch of Account shall not be inJapan;
(b) the Issuer shall indemnify and hold harmless the Holders of the N Covered Bondsagainst any tax, duty, assessment or governmental charge which is imposed or leviedupon such Holder as a consequence of such change, and shall pay the reasonablecosts and expenses of the Issuing and Paying Agent in connection with such change;and
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(c) notwithstanding (b) above, no change of the Branch of Account may be made unlessimmediately after giving effect to such change (i) no Issuer Event of Default,Guarantor Event of Default, Potential Issuer Event of Default or Potential GuarantorEvent of Default shall have occurred and be continuing and (ii) payments of principaland interest on N Covered Bonds of this Series relating thereto to Holders thereof(other than Excluded Holders, as hereinafter defined) shall not, in the opinion ofcounsel to the Issuer, be subject to any taxes, as hereinafter defined, to which theywould not have been subject had such change not taken place. For the purposes ofthis section, an “Excluded Holder” means a Holder of a N Covered Bond of thisSeries relating thereto who is subject to taxes by reason of his having someconnection with the Relevant Jurisdiction other than the mere holding of a NCovered Bond of this Series as a non-resident of such Relevant Jurisdiction.“Relevant Jurisdiction” means and includes Canada, its provinces or territories andthe jurisdiction in which the new Branch of Account is located, and “taxes” meansand includes any tax, duty, assessment or other governmental charge imposed orlevied in respect of the payment of the principal of the N Covered Bonds of thisSeries or interest thereon for or on behalf of a Relevant Jurisdiction or any authoritytherein or thereof having power to tax.
19. Substitution
Subject as provided in the Trust Deed, the Bond Trustee, if it is satisfied that to do so would not bematerially prejudicial to the interests of the holders of the N Covered Bonds, may agree, without theconsent of the holders of the N Covered Bonds, to the substitution of a Subsidiary of the Issuer inplace of the Issuer as principal debtor under the N Covered Bonds and the Trust Deed, provided thatthe obligations of such Subsidiary in respect of the N Covered Bonds and the Trust Deed shall beguaranteed by the Issuer in such form as the Bond Trustee may require.
Any substitution pursuant to this Condition 19 shall be binding on the holders of the N CoveredBonds and, unless the Bond Trustee agrees otherwise, shall be notified to the holders of the NCovered Bonds as soon as practicable thereafter in accordance with Condition 14.
It shall be a condition of any substitution pursuant to this Condition 19 that (i) the N Covered BondGuarantee shall remain in place or be modified to apply mutatis mutandis and continue in full forceand effect in relation to any Subsidiary of the Issuer which is proposed to be substituted for theIssuer as principal debtor under the N Covered Bonds and the Trust Deed; and (ii) any Subsidiary ofthe Issuer which is proposed to be substituted for the Issuer is included in the Registry as a registeredissuer and that all other provisions of the Covered Bond Legislative Framework and the CMHCGuide are satisfied prior to the substitution of the Issuer.
20. Rating Agency Condition
20.01 By subscribing for or purchasing N Covered Bond(s), each holder of N Covered Bonds shallbe deemed to have acknowledged and agreed that a credit rating of a Series of N Covered Bonds bythe Rating Agencies is an assessment of credit risk and does not address other matters that may be ofrelevance to holders of N Covered Bonds, including, without limitation, in the case of a confirmation
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by each Rating Agency that any action proposed to be taken by the Issuer, the Guarantor, the Seller,the Servicer, the Cash Manager, the Bond Trustee or any other party to a Transaction Document willnot result in a reduction or withdrawal of the rating of the N Covered Bonds in effect immediatelybefore the taking of such action (a “Rating Agency Condition”), whether such action is either (i)permitted by the terms of the relevant Transaction Document or (ii) in the best interests of, or notprejudicial to, some or all of the holders of N Covered Bonds.
20.02 In being entitled to have regard to the fact that a Rating Agency has confirmed that the thencurrent rating of the relevant Series of N Covered Bonds would not be reduced or withdrawn, eachof the Issuer, the Guarantor, the Bond Trustee, and the Secured Creditors (including the holders of NCovered Bonds) is deemed to have acknowledged and agreed that confirmation of the satisfaction ofthe Rating Agency Condition does not impose or extend any actual or contingent liability on theRating Agencies to the Issuer, the Guarantor, the Bond Trustee, the Secured Creditors (including theholders of N Covered Bonds) or any other person or create any legal relations between the RatingAgencies and the Issuer, the Guarantor, the Bond Trustee, the Secured Creditors (including theholders of N Covered Bonds) or any other person whether by way of contract or otherwise.
20.03 By subscribing for or purchasing N Covered Bond(s), each holder of N Covered Bonds shallbe deemed to have acknowledged and agreed that:
(a) a confirmation of the satisfaction of the Rating Agency Condition may or may not begiven at the sole discretion of each Rating Agency;
(b) depending on the timing of delivery of the request and any information needed to beprovided as part of any such request, it may be the case that a Rating Agency cannotconfirm the satisfaction of the Rating Agency Condition in the time available, or atall, and the Rating Agency shall not be responsible for the consequences thereof;
(c) a confirmation of the satisfaction of the Rating Agency Condition, if given, will begiven on the basis of the facts and circumstances prevailing at the relevant time, andin the context of cumulative changes to the transaction of which the N CoveredBonds forms a part; and
(d) a confirmation of the satisfaction of the Rating Agency Condition represents only arestatement of the opinions given, and shall not be construed as advice for the benefitof any holder of N Covered Bonds or any other party.
20.04 If a confirmation of the satisfaction of the Rating Agency Condition or some other responseby a Rating Agency is a condition to any action or step or is otherwise required under anyTransaction Document and a written request for such confirmation of the satisfaction of the RatingAgency Condition or response is delivered to that Rating Agency by any of the Issuer, the Guarantorand/or the Bond Trustee, as applicable (each a “Requesting Party”), and either (i) the RatingAgency indicates that it does not consider such confirmation or response necessary in thecircumstances or (ii) within 30 days (or, in the case of Moody’s or Fitch, 10 Business Days) of actualreceipt of such request by the Rating Agency, such request elicits no confirmation or response and/orsuch request elicits no statement by the Rating Agency that such confirmation or response could notbe given, the Requesting Party will be entitled to disregard the requirement for a confirmation of the
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satisfaction of the Rating Agency Condition or affirmation of rating or other response by the RatingAgency and proceed on the basis that such confirmation or affirmation of rating or other response bythe Rating Agency is not required in the particular circumstances of the request. The failure by aRating Agency to respond to a written request for a confirmation or affirmation shall not beinterpreted to mean that such Rating Agency has given any deemed confirmation of the satisfactionof the Rating Agency Condition or affirmation of rating or other response in respect of such action orstep.
21. Indemnification of Bond Trustee and Bond Trustee contracting with the Issuer and/orthe Guarantor
If, in connection with the exercise of its powers, trusts, authorities or discretions the Bond Trustee isof the opinion that the interests of the holders of the N Covered Bonds of any one or more Serieswould be materially prejudiced thereby, the Bond Trustee shall not exercise such power, trust,authority or discretion without the approval by Extraordinary Resolution of such holders of therelevant Series of N Covered Bonds then outstanding or by a direction in writing of such holders ofthe N Covered Bonds of at least 25 per cent. of the Principal Amount Outstanding of N CoveredBonds of the relevant Series then outstanding.
The Trust Deed and the Security Agreement contain provisions for the indemnification of the BondTrustee and for relief from responsibility, including provisions relieving the Bond Trustee fromtaking any action unless indemnified and/or secured to the satisfaction of the Bond Trustee.
The Trust Deed and the Security Agreement also contain provisions pursuant to which the BondTrustee is entitled, among other things: (i) to enter into business transactions with the Issuer, theGuarantor and/or any of their respective Subsidiaries and affiliates and to act as trustee for theholders of any other securities issued or guaranteed by, or relating to, the Issuer, the Guarantorand/or any of their respective Subsidiaries and affiliates; (ii) to exercise and enforce its rights,comply with its obligations and perform its duties under or in relation to any such transactions or, asthe case may be, any such trusteeship without regard to the interests of, or consequences for, theholders of the N Covered Bonds or the other Secured Creditors; and (iii) to retain and not be liable toaccount for any profit made or any other amount or benefit received thereby or in connectiontherewith.
The Bond Trustee will not be responsible for any loss, expense or liability, which may be suffered asa result of any Portfolio Assets, or any deeds or documents of title thereto, being uninsured orinadequately insured or being held by clearing organisations or their operators or by intermediariessuch as banks, brokers or other similar persons on behalf of the Bond Trustee. The Bond Trustee willnot be responsible for: (i) supervising the performance by the Issuer or any other party to theTransaction Documents of their respective obligations under the Transaction Documents and theBond Trustee will be entitled to assume, until it has written notice to the contrary, that all suchpersons are properly performing their duties; (ii) considering the basis on which approvals orconsents are granted by the Issuer or any other party to the Transaction Documents under theTransaction Documents; (iii) monitoring the Covered Bond Portfolio, including, without limitation,whether the Covered Bond Portfolio is in compliance with the Asset Coverage Test and/or theAmortization Test; or (iv) monitoring whether the Portfolio Assets satisfy the Eligibility Criteria.
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The Bond Trustee will not be liable to any holder of the N Covered Bonds or other Secured Creditorfor any failure to make or to cause to be made on their behalf the searches, investigations andenquiries which would normally be made by reasonable and prudent institutional mortgage lendersin the Seller’s market in relation to the Security and have no responsibility in relation to the legality,validity, sufficiency and enforceability of the Security and the Transaction Documents.
22. Governing Law; Jurisdiction; Partial Invalidity
Governing Law
22.01 With the exception of Conditions 3 (Status of the N Covered Bonds), 7 (Events of Default),13 (Meetings of Holders of the Covered Bonds, Modification and Waiver), 19 (Substitution), 20(Rating Agency Condition) and 21 (Indemnification of Bond Trustee and Bond Trustee contractingwith the Issuer and/or the Guarantor) of these Terms and Conditions, which are governed by, andshall be construed in accordance with, the laws of the Province of Ontario and the federal laws ofCanada applicable therein, the N Covered Bonds and all rights and obligations arising under the NCovered Bonds (including any non-contractual rights and obligations) are governed by, and shall beconstrued in accordance with, the laws of the Federal Republic of Germany.
The Trust Deed, Agency Agreement thereto and the other Transaction Documents, except asspecified therein, are governed by and shall be construed in accordance with the laws of the Provinceof Ontario and the federal laws of Canada applicable therein.
Place of Jurisdiction
22.02 The courts of the Province of Ontario (Canada) shall have the exclusive jurisdiction for anyactions or other legal proceedings arising out of or in connection with the N Covered Bonds and theIssuer, the Guarantor, any applicable Agent and any Holder waive any right to invoke, and undertakenot to invoke, any claim of forum non conveniens and irrevocably submit to the jurisdiction of thecourts of Ontario in respect of any action or proceeding relating in any way to the N Covered Bonds.
Partial Invalidity
22.03 If any provision of these Terms and Conditions is or becomes invalid or unenforceable inwhole or in part, the remaining provisions shall remain unaffected thereby. Invalid or unenforceableprovisions shall be deemed to be replaced by such valid and enforceable provisions which takinginto consideration the purpose and intent of these Terms and Conditions have to the extent legallypossible the same economic effect as the invalid or unenforceable provisions. This shall applymutatis mutandis to any gap (Lücke) in these Terms and Conditions.
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PART 3PRO FORMA FINAL TERMS FOR N COVERED BONDS
Final Terms dated [ ]
(a Canadian chartered bank)
Issue of Series [] [Principal Amount] N Covered Bondunder the
U.S.$7 billion
Global Covered Bond Programmeunconditionally and irrevocably guaranteed as to payments by
NBC COVERED BOND (LEGISLATIVE) GUARANTOR LIMITED PARTNERSHIP(a limited partnership formed under the laws of Ontario)
THE N COVERED BOND DESCRIBED IN THESE FINAL TERMS HAS NOT BEENAPPROVED OR DISAPPROVED BY CANADA MORTGAGE AND HOUSINGCORPORATION (“CMHC”) NOR HAS CMHC PASSED UPON THE ACCURACY ORADEQUACY OF THESE FINAL TERMS. THE N COVERED BOND DESCRIBED INTHESE FINAL TERMS IS NOT INSURED OR GUARANTEED BY CMHC OR THEGOVERNMENT OF CANADA OR ANY OTHER AGENCY THEREOF.
THE N COVERED BOND DESCRIBED IN THESE FINAL TERMS HAS NOT BEENREGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE“SECURITIES ACT”) OR ANY OTHER APPLICABLE U.S. STATE SECURITIES LAWSAND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITEDSTATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS.
THE N COVERED BOND DESCRIBED IN THESE FINAL TERMS IS NOT ATRANSFERABLE SECURITY WITHIN THE MEANING OF ART. 2 (1) LIT. (A) OF THEPROSPECTUS DIRECTIVE 2003/71/EC OF THE EUROPEAN PARLIAMENT AND OFTHE COUNCIL OF 4 NOVEMBER 2003, AS AMENDED, AND MAY ONLY BE OFFEREDOR SOLD IN COMPLIANCE WITH ANY LEGISLATION WHICH IS APPLICABLE TOTHE OFFERING AND SALE OF SUCH INSTRUMENTS WHERE THE OFFERING ORSALE TAKES PLACE. IN GERMANY, THE N COVERED BOND MAY IN PARTICULARONLY BE OFFERED OR SOLD IN ACCORDANCE WITH THE GERMAN CAPITALINVESTMENTS ACT (VERMÖGENSANLAGEN-GESETZ).
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PART A – CONTRACTUAL TERMS
This document constitutes the Final Terms of the N Covered Bond described herein and must beread in conjunction with the Terms and Conditions attached to the Series [] N Covered Bond (theTerms and Conditions so supplemented, the “N Covered Bond Conditions”).
Capitalized terms not otherwise defined herein shall have the meanings specified in the Terms andConditions. All references in these Final Terms to numbered Sections and Paragraphs are – unlessstated otherwise – to sections and paragraphs of the Terms and Conditions. All provisions in theTerms and Conditions corresponding to items in these Final Terms which are indicated as notapplicable, not completed or deleted shall be deemed to be deleted from the Terms and Conditions.
Full information on the Issuer and the offer of the N Covered Bond is only available on the basis ofthe combination of these Final Terms, the Terms and Conditions and the Base Prospectus dated [][as supplemented on [][and[]]]. The Base Prospectus [and the supplement(s) to the BaseProspectus] [is] [are] available during normal business hours at the registered office of the Issuer andat the Specified Office of the Registrar and Paying Agent(s) where copies may be obtained.
1. (i) Issuer: National Bank of Canada
Branch: [Head office of the Bank in Montréal] [London branch][ branch]
(ii) Guarantor: NBC Covered Bond (Legislative) Guarantor LimitedPartnership
2. Series Number: [ ]
3. Specified Currency: [ ]
4. Principal Amount of Series: [ ]
5. Issue Price: [ ]% of the Aggregate Principal Amount [plusaccrued interest from [insert date] (if applicable)]
6. (i) MinimumAssignmentAmount:
[ ]
[Should be normally either €1,000,000 or €500,000 and,in order not to trigger a prospectus requirement underthe German Capital Investment Act(Vermögensanlagengesetz) (though other exceptionsmight be applicable), should be at least €200,000.]
(ii) Calculation Amount: [Should be equal to the minimum assignment amount .]
7. (i) Issue Date: [ ]
(ii) Interest Commencement Date: [Issue Date/Not Applicable]
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8. (i) Maturity Date: [ ]
(ii) Extended Due for PaymentDate of Guaranteed Amountscorresponding to the FinalRedemption Amount under theCovered Bond Guarantee:
[ ]
9. Interest Basis: [ ]] per cent. Fixed Rate]
[[ ] +/- [ ]per cent. Floating Rate][Zero Coupon](further particulars specified in item 15 below)
10. Redemption/Payment Basis: [Redemption at par] [Hard Bullet Covered Bond][Instalment]
11. Change of Interest Basis: [If item 8(ii) applicable; Applicable – see item 9 above]/[Not Applicable]
12. Put/Call Options: [Investor Put]
[Issuer Call]
[(further particulars specified in items 17 and 18 below)]
13. (i) [Date [Board]approval forissuance ofCoveredBondsobtained:
[ ] [and [ ], respectively]]
PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE
14. Fixed Rate Covered Bond Provisions: [Applicable/Not Applicable]
(Condition 5.02)
(i) Rate[(s)] ofInterest:
[ ] per cent. per annum [payable [annually/semi-annually/quarterly/monthly] in arrears on each InterestPayment Date]
(ii) Interest Payment Date(s): [ ] in each year [adjusted in accordance with theBusiness Day Convention /not adjusted] up to andincluding the [Final Maturity Date] [Extended Due forPayment Date, if applicable] (provided however thatafter the Extension Determination Date, the Interest
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Payment Date shall be monthly)
(iii) Fixed Coupon Amount[(s)]: [ ] per Calculation Amount
(iv) Broken Amount(s) [ ] per Calculation Amount, payable on the InterestPayment Date falling [on/or] [ ]
(v) Day Count Fraction: [Actual/Actual or Actual/Actual (ISDA)Actual/365 (Fixed)Actual/36030E/360 or Eurobond Basis30/360 or 360/360 or Bond Basis30E/360 (ISDA)Actual/Actual (ICMA) or Act/Act (ICMA)]
(vi) Determination Dates: [[ ] in each year]/[Not Applicable]
15. Floating Rate Covered Bond Provisions: [Applicable/Not Applicable]
(Condition 5.03)
(i) InterestPeriod(s):
[ ]
(ii) Specified Interest PaymentDates:
[ ] (provided however that after the ExtensionDetermination Date, the Specified Interest Payment Dateshall be monthly)
(iii) Business Day Convention: [Following Business Day Convention/ModifiedFollowing Business Day Convention/ Modified BusinessDay Convention/ Preceding Business Day Convention/FRN Convention/ Eurodollar Convention]
(iv) Financial Centre(s): [ ]
(v) Manner in which the Rate(s) ofInterest is/are to be determined:
[Screen Rate Determination/ISDA Determination]
(vi) Party responsible for calculatingthe Rate(s) of Interest andInterest Amount(s) (if not the[Agent]):
[ ]
(vii) Screen Rate Determination:
– Reference Rate: [LIBOR/EURIBOR]
– Interest Determination Date(s) [Second London Business Day prior to the start of eachInterest Period] [first day of each Interest Period ][ thesecond day on which the TARGET2 System is openprior to the start of each Interest Period] [ ] [days prior
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to start of each Interest Period]
– Relevant Screen Page [Reuters LIBOR01/Reuters EURIBOR01]
– Relevant Time: [ ]
– Reference Banks: [ ]
(viii) ISDA Determination: Issuer is [Fixed Rate/Fixed Amount/FloatingRate/Floating Amount] Payer
– Floating Rate Option: [ ]
– Designated Maturity: [ ]
– Reset Date: [ ]
(ix) Margin(s): [+/-][ ] per cent. per annum
(x) Minimum Interest Rate:
(Condition 5.05) [ ] per cent. per annum]/[Not Applicable]
(xi) Maximum Interest Rate:
(Condition 5.05) [ ] per cent. per annum] /[Not Applicable]
(xii) Day Count Fraction: Actual/Actual or Actual/Actual (ISDA)Actual/365 (Fixed)Actual/36030E/360 or Eurobond Basis30/360 or 360/360 or Bond Basis30E/360 (ISDA)Actual/Actual (ICMA) or Act/Act (ICMA)]
16. Zero Coupon Covered Bond Provisions: [Applicable/Not Applicable]
(i) AmortizationYield:
[ ] per cent. per annum]
(ii) Reference Price: [ ]
PROVISIONS RELATING TO REDEMPTION
17. Call Option [Applicable/Not Applicable]
(Condition 6.03)
(i) OptionalRedemption
[ ]
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Date(s):
(ii) Optional RedemptionAmount(s) of each CoveredBond and method, if any, ofcalculation of such amount(s):
[ ] per Calculation Amount
(iii) If redeemable in part:
(a) Minimum RedemptionAmount:
[ ] per Calculation Amount
(b) Maximum RedemptionAmount:
[ ] per Calculation Amount
(iv) Notice Period [ ]
18. Put Option [Applicable/Not Applicable]
(Condition 6.06)
(i) OptionalRedemptionDate(s):
[ ]
(ii) Optional RedemptionAmount(s) of each CoveredBond and method, if any, ofcalculation of such amount(s):
[ ] per Calculation Amount
(iii) Notice period [ ]
19. Final Redemption Amount of eachCovered Bond
[ ] per Calculation Amount
20. Early Redemption Amount:
Early Redemption Amount(s) payable onredemption for taxation reasons orillegality or upon acceleration followingan Issuer Event of Default or GuarantorEvent of Default or other earlyredemption and/or the method ofcalculating the same (if required or ifdifferent from that set out in theConditions):
[ ] per Calculation Amount
GENERAL PROVISIONS APPLICABLE TO THE N COVERED BOND
21. Form of the Covered Bond: N Covered Bond (gedeckte Namensschuldverschreibung)
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(i) Registrar: [Name and address]
(ii) Paying Agent [Name and address]
Method of payment of partialinterest upon transfers duringinterest periods (Condition9.02):
[Eurobond Interest Upon Transfer(s)] OR [Partial InterestUpon Transfer(s)]
(iii) Calculation Agent: [Not applicable][Name and address]
(iv) Settlement Procedures: Delivery [against/free of] payment.
[usually “Delivery free of payment” for N Covered Bonds]
22. Exclusion of set-off [The Issuer waives any right of set-off against the claimsarising from the N Covered Bond as well as the exercise ofany pledge, right of retention or other rights through whichthe claims of the Holder could be prejudiced:
[(i)] [as long as and to the extent that such claims formpart of the restricted assets (gebundenesVermögen) within the meaning of § 54 of theGerman Act Concerning the Supervision ofInsurance Companies (Gesetz über dieBeaufsichtigung der Versicherungsunternehmen -Versicherungsaufsichtsgesetz) or the N CoveredBond is being held by a German professionalpension fund (Versorgungswerk);]
[(ii)] [as long as and to the extent that such claimsbelong to funds which serve as cover(Deckungswerte) for Pfandbriefe issued pursuantto the German Pfandbrief Act (Pfandbriefgesetz)or other domestic covered bonds legislation;]
[(iii)] [insert other circumstances if applicable]]
23. Financial Centre(s) or other specialprovisions relating to payment dates:
[ ]/ [Not Applicable]
24. Details relating to Instalment CoveredBonds: amount of each instalment(“Instalment Amounts”), date on whicheach payment is to be made(“Instalment Dates”):
Instalment Amount(s): [Not Applicable]/[ ]
Instalment Date(s): [Not Applicable] /[ ]
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Signed on behalf of the Issuer: Signed on behalf of the Managing GP for and onbehalf of the Guarantor:
By: By:Duly authorized Duly authorized
By: By:Duly authorized Duly authorized
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PART B – OTHER INFORMATION
NOTE: The following information is given for purposes of information of the Holder but does not formpart of the N Covered Bond Conditions.
RATINGS The Covered Bonds to be issued have been rated:
Ratings: [Moody’s: Aaa]
[Fitch: AAA]
[DBRS: AAA]
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PART 4FORM OF N COVERED BOND ASSIGNMENT AGREEMENT
N COVERED BOND ASSIGNMENT AGREEMENT
THIS N COVERED BOND ASSIGNMENT AGREEMENT (the “Agreement”) is made on[insert date] BETWEEN:
(1) [insert name and complete address of assignor] (the “Assignor”); and
(2) [insert name and complete address of assignee] (the “Assignee”);
together the “Parties” and each a “Party”.
WHEREAS:
(1) This Agreement relates to the Series [] N Covered Bond due [insert maturity date] (the “NCovered Bond”) issued by National Bank of Canada (the “Issuer”).
(2) The Assignor is Holder of the N Covered Bond in the principal amount of [insert holding ofthe assignor of the N Covered Bond prior to the assignment contemplated hereunder].
NOW IT IS HEREBY AGREED as follows:
1. Definitions and Interpretations
1.1 Unless specified otherwise, capitalized terms used, but not defined in this Agreement shall
have the meaning given to them in the terms and conditions of the N Covered Bond which
are attached to the N Covered Bond (the “N Covered Bond Conditions”).
2. Assignment
2.1 Assignment. The Assignor hereby assigns to the Assignee its claims against the Issuer under
the N Covered Bond pursuant to the N Covered Bond Conditions together with all rights
relating thereto, in the amount of:
[Euro][insert other specified currency] [],000,000
(in words: [insert amount assigned in words] [Euro][insert other specified currency])
with interest from and including: [insert transfer date] (the “Transfer Date”).
2.2 Acceptance of Assignment. The Assignee hereby accepts such assignment.
3. Notification and Registration
3.1 Notification of Registrar. In accordance with Condition 2 (Title and Transfer) of the N
Covered Bond Conditions, the Assignor shall immediately notify the Registrar of the
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assignment contemplated hereunder by sending an executed copy of this Agreement together
with the certificate made out in its name and evidencing the N Covered Bond to [details of
the Registrar to be inserted].
3.2 Effectiveness of Assignment. The assignment shall only become effective upon registration
thereof in the Register maintained by the Registrar. The Registrar will register the transfer if
the requirements set out in Condition 2 (Title and Transfer) of the N Covered Bond
Conditions are met.
4. Designated Account of and Notices to the Assignee
4.1 Designated Account. For the purpose of Condition 9 (Payments) of the N Covered Bond
Conditions, the Designated Account of the Assignee shall be the bank account with the
following references:
Account holder: []Name of bank: []Account number: []SWIFT CODE: []IBAN: []Reference []
4.2 Address for notices. For the purpose of Condition 14 (Notices) of the N Covered Bond
Conditions, the contact details of the Assignee shall be the following:
Address: []Attention: []Telephone: []Fax: []Email: []
5. Issue and Delivery of new certificate(s)
Against surrender of the certificate issued in the name of the Assignor to the Registrar,the Assignee requests that a new certificate made out in its name in the amount assignedunder this Agreement will be issued by the Issuer[,][and] authenticated by the Registrar[and, at the risk of the Assignee, be sent by uninsured mail to the Assignee at theaddress first above written.][In case of partial assignments insert: The Assignorrequests that a new certificate made out in its name in the amount not assigned hereunderand retained by the Assignor will be issued by the Issuer[,][and] authenticated by theRegistrar [and, at the risk of the Assignor, be sent by uninsured mail to the Assignorat the address first above written.]
6. Copies
This Agreement shall be executed in three original copies, each of which may beexecuted in any number of counterparts. Signing counterparts shall have the same effectas if the Parties had executed a single copy of this Agreement. One original copy shall be
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retained by the Assignor and Assignee respectively and one original copy shall be sent tothe Registrar (together with a list of authorised signatories of the Assignor and theAssignee).
7. Governing Law, Partial Invalidity, Language
7.1 Governing Law. This Agreement (including any non-contractual rights and obligations
arising out of or in connection with this Agreement) shall be governed by and construed in
accordance with German law.
7.2 Partial Invalidity. If any provision of this Agreement or part thereof should be or become
invalid or unenforceable, this shall not affect the validity or enforceability of the remaining
provisions hereof. The invalid or unenforceable provision shall be deemed to be replaced by
such valid and enforceable provision which taking into consideration the purpose and intent
of this Agreement has to the extent legally possible the same economic effect as the invalid
or unenforceable provision. This shall apply mutatis mutandis to any omission in this
Agreement.
7.3 Language. This Agreement is written in the English language. A German language
translation may be provided for convenience. Only the English text shall be binding.
Assignor
By: ______________________________ By: _____________________________Name: Name:Title: Title:
Assignee
By: ______________________________ By: _____________________________Name: Name:Title: Title:
[the below is required, if the N Covered Bond has been allocated to the restricted assets of theHolder:]
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Consent of the [deputy of the ]Trustee ([Stellvertreter des] Treuhänder[s] für dasSicherungsvermögen) with respect to the assignment
I am writing to you in my capacity as [deputy of the] trustee of the restricted assets of the Holder([Stellvertreter des] Treuhänder[s] für das Sicherungsvermögen).
I hereby give my consent to the assignment described above.
Date: …………. ………………………………………………………………….
signature of the [deputy of the ]Trustee
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PART 5FORM OF NOTIFICATION RE RESTRICTED ASSETS
[On the letterhead of the Holder]
To: National Bank of Canada (the “Issuer”)
and
[] (the “Registrar”)
[insert date]
Dear Sirs,
Notification of the allocation of the N Covered Bond to the Holder’s restricted assets
Reference is made to the Series [] N Covered Bond (the "N Covered Bond") issued by National Bank ofCanada on [] and due [], in the principal amount of EUR [],000,000.
Terms used, but not defined in this notice shall have the meanings given to them in terms and conditions ofthe N Covered Bond.
We have assigned the N Covered Bond to our restricted assets (Sicherungsvermögen) which are blocked forthe benefit of our trustee appointed pursuant to § 70 of the German Insurance Supervision Act(Versicherungsaufsichtsgesetz) and its deputy (Treuhänder für das Sicherungsvermögen bzw. dessenStellvertreter).
The trustee (or, as the case may be, its deputy) confirm hereinafter that all payments under the N CoveredBond may be made with discharging effect to the account designated therein.
Please acknowledge receipt of this letter by countersigning the attached copy of this letter.
Yours faithfully
By:......................................................
Name:Title:
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Consent of the [deputy of the ]Trustee ([Stellvertreter des ]Treuhänder[s] für das Sicherungsvermögen)with respect to payments
I am writing to you in my capacity as [deputy of the] trustee ([Stellvertreter des ]Treuhänder[s] für dasSicherungsvermögen) of the restricted assets of the Holder.
I hereby agree that all payments due under the N Covered Bond may be made with discharging effect to [theaccount which has been notified to you by the Holder][the following account: []]
Date: …………. ………………………………………………………………….signature of the [deputy of the ]Trustee